US crackers should restart in June, relieve BD feedstock supplies

27 April 2012 17:26  [Source: ICIS news]

HOUSTON (ICIS)--US crackers should resume operations by the end of June, marking the completion of an unusually busy turnaround season that tightened supplies of crude C4, from which butadiene (BD) is extracted, the CEO of TPC Group said on Friday.

Crackers produce crude C4 as a byproduct, especially when they use heavier feedstock such as naphtha.

The tight supplies of crude C4 was the main reason for the large first-quarter increase in BD prices, said Mike McDonnell, TPC Group CEO.

He made his comments during an earnings conference call.

US BD contracts rose from an average of 98 cents/lb in December to 153.5 cents/lb in April, as assessed by ICIS.

The higher BD prices offset a 13% decline in first-quarter BD sales volumes, which TPC Group also attributed to limited supplies of crude C4.

In particular, TPC Group benefitted a time lag, from when it bought crude C4 and when it sold the finished BD, the company said.

This effect should be short lived, since it takes TPC Group an average of 20 days to turn its inventories, McDonnell said.

TPC Group stock traded at $39.74, down 12.20%, as of 11:58 hours New York time (16:58 hours GMT) on the NASDAQ.

By: Al Greenwood
+1 713 525 2645

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