industry/Business
Surprise comeback for antiknock compounds Strong demand, surge in export market promise to push output up 8% this year, reversing three-year tailspin For a product that faces being legislated out of the market, lead antiknock compounds look surprisingly chipper indeed. While various government agencies still haggle over just how strict the regulations on lead-free gasoline should be, and how soon they should become effective, the four U.S. producers of lead antiknock compounds are busy selling just about every pound they can produce. All of them agree that the antiknock market is tight. Behind this tight supply situation lies a strong domestic demand for lead antiknock compounds and a strong, if temporary, surge in the export market. Together, they should push U.S. production of lead antiknock compounds up by 8% this year to about 1.2 billion pounds and put a halt to a three-year tailspin in antiknock production. This 1.2 billion pound figure represents antiknock compound as sold; that is, the lead alkyl and the lead scavengers (ethylene dichloride and ethylene dibromide) with which they are combined. It does not represent only the lead alkyls, tetraethyllead and tetramethyllead, as reported by the U.S. Tariff Commission. Of this 1.2 billion pounds, roughly 35% is TML-based; the remainder is based on TEL. The volume of
U.S. output of antiknock will be up in 1972 . . .
TML used in antiknock compounds has been steadily increasing ever since it was first made commercially available in 1960, primarily because it is more effective than TEL in the more aromatic gasolines. This year, U.S. gasoline consumption is running almost 7% ahead of last year, when 96.3 billion gallons were burned on the nation's highways. The normal growth rate for gasoline consumption is 3 to 4%, but the increasing population of late model cars, with their lower fuel economies, is pushing the growth rate upward. Despite the furor and publicity about low-lead gasoline, very little of it will be sold this year. In fact, with crude supplies tight and refiners straining to squeeze all of the gasoline they can out of the barrel, refiners are using all of the antiknock compound they can get to improve the octane rating of their product. Exports of antiknock compounds received an unexpected boost this year from Britain's power strike. As a result of the strike earlier this year, Associated Octell, Ltd., the U.K.'s only antiknock producer and a major factor in the international market, was forced to reduce its output. U.S. exports filled the gap. For the first half of 1972, for instance, 9.4 million pounds of U.S. antiknock compounds were shipped to Britain, compared to 2.2 million pounds during the first half of 1971. Because Associated Octell is owned by five oil companies (British Petroleum, Shell, Mobil, Texaco, and Standard Oil of California), it has a lock on the antiknock market in many third countries where its parents have refineries. How-
. . . boosted in part by increasing exports
Millions of pounds
Millions of pounds
1600
140
. . . particularly to Brazil and the U.K. Millions of pounds
1500 120 1400 100
1200 1100 60
1000
1965
6
66
67
68
C&EN Nov. 20, 1972
69
70
71·
1972·
1965 66
F
Brazil Finland Mexico Peru Singapore Spain Taiwan U.K. Other countries Total
Production
1300
ever, with Associated Octell's production reduced as a result of the power strike, U.S. companies are filling these voids, too. For instance, during the first half of 1971, U.S. producers shipped only 354,000 pounds of antiknock compounds to Singapore, which is almost exclusively Octell territory. During the first six months of this year, however, 3.4 million pounds of U.S. antiknock compounds moved into Singapore. Another 3.6 million pounds went to Australia, where Octell's oil company parents command about 85% of all refining capacity. U.S. producers have been fortunate this year in winning some major contracts that are awarded by tender, or bid. U.S. antiknock exports to Brazil, for example, have jumped from 5.3 million pounds during the first six months of 1971 to 11.4 million pounds for the same period this year. The happy combination of tender awards and Britain's power strike will propel U.S. antiknock exports upward by about 25% this year to 135 million pounds. But U.S. producers are realistic enough to know that this kind of growth cannot be sustained. The tender business fluctuates wildly from one low bidder to another. Already, some, of next year's Brazilian business has been awarded to Octell. And power strikes, even in Britain, are not an annual event. U.S. producers expect 1973 to be another export year for them, but they don't expect another surge such as the one they enjoyed this year. And with the low-lead and no-lead regulations staring them in the face, 1973 will go down as the year in which they made hay while the sun shone.
67
68
69
70
71
1972»
rst-half 1971
5.3 0.8 1.2 1.3 0.4 1.9 1.6 2.2 38.1 52.8
F rst-half
11.4 1.9 4.0 2.1 3.4 3.0 4.7 9.4 24.7 64.6
a C&EN estimates. Sources: Production figures are C&EN calculations based on Tariff Commission statistics for output of lead alkyls and on industry sources: export figures, U.S. Bureau of the Census
