US aromatics volatility pressures isocyanates – Bayer executive

21 March 2013 22:50  [Source: ICIS news]

HOUSTON (ICIS)--Volatility in the aromatics market is threatening margins for isocyanates, an executive with Bayer said on Thursday.

Aromatics are feedstock for both methyl di-p-phenylene isocyanate (MDI) and toluene di-isocyanate (TDI).

Moreover, prices for aromatics have been volatile, said Tim Chappell, product manager at Bayer. Chappell made his comments at the IHS World Petrochemical Conference.

"We simply don't have the margins to absorb those changes," Chappell said.

He attributed the volatility in aromatics prices to the advent of shale gas in the US.

Naphtha cracking is one of the sources of aromatics. US crackers have switched from naphtha to lighter feeds because of rising shale-gas production, which has also increased supplies of natural gas liquids (NGLs).

In addition, market sources have said that shale oil is producing less aromatics at refineries, another significant source.

The IHS World Petrochemical Conference lasts through Thursday.

Additional reporting by Brian Balboa

By: Al Greenwood
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