TDP/HDA margins pushed into negative territory

13 December 2007 08:48  [Source: ICIS news]

SINGAPORE (ICIS news)--Benzene-toluene prices were at par on Thursday, pushing the margins for toluene disproportionation (TDP) and hydro-dealkylation (HDA) producers further into negative territory, said traders and producers. 

 

The spread between benzene and toluene values narrowed further with toluene prices only $5-$10/tonne (€3-€7/tonne) lower than benzene values in Asia.

 

Traders and producers said that the current situation had worsened the margins of TDP/HDA producers.

 

Traditionally, toluene prices should be $150/tonne lower than benzene values for the economics to be viable for production.

 

Economics had been poor for the past few weeks, with a number of producers in Korea and Japan considering or implementing cutting back of operating rates, they added.

 

One Japanese producer said that majority of the TDP/HDA plants in Japan were running below 50% production level.

 

“The economics is poor and most producers want to cut operating rates in Korea, but top management does not want to,” said a Korean producer.

 

Toluene prices in Asia surged to $945-$960/tonne FOB (free on board) Korea, $30/tonne higher than Wednesday, according to global chemical market intelligence service ICIS pricing.

 

Benzene prices in Asia were assessed $15/tonne higher at $955-$965/tonne FOB Korea, as bids for big berth January cargoes were cited at $955/tonne FOB Korea.

 

No offers were heard.

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Author: Mahua Chakravarty
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