US toluene conversion margins have improved on paper during the past week on the back of stronger benzene and paraxylene pricing, S&P Global Platts data showed.
Selective toluene disproportionation margins were last estimated at just over $83/mt on Feb. 23, up from near break-even levels just one week ago. Toluene disproportionation margins posted similar gains and were estimated at near $47/mt.
The increases come on the heels of an arctic freeze that hit the US Gulf Coast last week, knocking multiple refiners and chemical producers offline. More than 1.5 million mt/year of benzene capacity was impacted by the storm as producers such as Shell, ExxonMobil, Citgo, FHR and Marathon shut down assets. This pushed the benzene market higher with spot values rising nearly 22% since the beginning of the month, last assessed Feb. 23 at 290 cents/gal ($868/mt) DDP USG.
Similar dynamics were seen in the associated paraxylene markets where outages were expected to three-four weeks, lending support to higher pricing. Prompt spot paraxylene prices were assessed Feb. 23 at $855/mt FOB USG as sources anticipated outages could last as much as four weeks. Spot paraxylene prices were up $220/mt since the beginning of the month, Platts data showed.
Feedstock toluene pricing, meanwhile, has seen its recent run in pricing slow with nitration-grade pricing hovering near 242 cents/gal FOB USG ($735/mt) as activity stalled due to refinery outages.
Sources anticipated that benzene would likely to remain snug through H1 March as refiners focus on gasoline and diesel production, but said margins could be under threat from limited toluene availability and expected increased demand from the gasoline segment.
