Study finds global benzene markets will see tight supply through 2008

By OGJ editors
HOUSTON, Mar. 15 -- Worldwide benzene markets are forecast to experience supply tightness through 2008, which will be "exaggerated if demand growth rates accelerate beyond those forecast to 2006," according to a recent report released by Houston-based chemical consulting firm Chemical Market Associates Inc. (CMAI).

CMAI's annual report, World Benzene Analysis, covers various areas of the benzene market, including capacity, supply, demand, trade, prices, profitability, technology, and production costs.

Other expectations, according to CMAI, include.

-- Significant cost pressure from alternative values of primary extraction feed and incremental toluene feed as refineries adapt to new gasoline reformulation regulations as well as tighter global aromatics balances.

-- The workings of market-balancing mechanisms will experience "time lags" as the major trading regions seek out imports to balance their requirements (rather than local incremental production sources). "This will likely lead to increases in short-term price volatility," CMAI said.

-- New production capacity slated to come on stream in the Middle East will not provide significant relief to the global balances.

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