Aromatics feedstocks: ‘Back to the Future’

Petrol pump.jpg

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.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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