For the past 40 years, the aromatics industry has usually had to ‘bid away’ its feedstock from the octane and gasoline pool. The only exception took place in S Korea during the early 1990’s, when local gasoline demand was low. This gave the new S Korean paraxylene (PX) producers the lowest cost base in the world.
Our Aromatics & Derivatives Conference last November forecast that that those days might be returning, on a more widespread basis. Gasoline is expected to move into surplus in many regions, including Europe and parts of Asia. This will offer aromatics producers the opportunity to obtain truly low-cost feedstocks.
Now ICIS news reports that Cosmo Oil of Japan, and Hyundai Oilbank of S Korea, have announced plans for a new JV to build an 800kt PX plant at Daesan, S Korea, in 2013. And Cosmo confirms that its aim with the JV is to “tackle decreasing demand in the domestic gasoline market”.
It will be interesting to see if Cosmo’s investment starts a new trend.