Originally aired: December 9, 2015
After reaching unprecedented levels above spot pricing during the spring and summer of 2015, toluene and xylenes blend values returned to normal levels during the fourth quarter. The unexpected increase in US octane demand took the industry by surprise as lower gasoline prices pushed US consumers to demand more high octane gasoline. In addition, greater availability of suboctane components at low prices in US gasoline increased the demand for high octane blending components such as toluene and mixed xylenes.
High toluene and mixed xylenes blend values reduced the availability of spot cargos as these high octane streams were left in gasoline. Toluene conversion units that produce incremental mixed xylenes and benzene supplies in the US market saw unfavorable margins that led to significant reduction in operating rates throughout the year. In addition, non-integrated paraxylene production was also reduced as higher feedstock mixed xylenes costs squeezed margins as well in the presence of competitive imports from other regions.
Will these market conditions repeat themselves in 2016? Listen to this webinar as Paco Rangel, VP of Aromatics for this webinar discusses: