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Antifreeze Prices Seen Rising On Tighter Supplies

August 1, 1988

OMAHA, Neb. (AP) _ The price of antifreeze has doubled to about $7.00 a gallon due to low supplies and may move even higher, suppliers and distributors say.

Demand for a compound used in plastics and antifreeze has reduced supplies worldwide, distributors of antifreeze told the Omaha World-Herald. Several plant explosions have added to the problem, removing production accounting for up to a fifth of the nation’s demand, and an antifreeze shortage is possible, they said.

″There’s going to be a situation this fall where shelves are quite empty,″ said Mike Mielenz, manager of specialty products for Texaco in Houston.

Antifreeze is used in the cooling systems of cars and other vehicles to protect their engines from freezing in the winter and overheating in the summer.

Riaz Waraich, president of Old World Trading Co., one of the country’s major antifreeze suppliers, said the antifreeze shortage is a long-term problem caused by a shortage of ethylene glycol, a compound derived from natural gas that is the base for antifreeze, plastics and polyesters.

Plastics are in high demand for everything from pop bottles to videocassette tapes and the plastic and antifreeze markets compete for ethylene glycol, Waraich said from Des Plaines, Ill.

Antifreeze, the smallest and least profitable part of the ethylene glycol market, is losing the competition, Waraich said.

Just when demand for the compound was increasing, a series of refinery explosions took a big bite out of the ethylene glycol supply. Explosions last year in plants in Antwerp, Belgium, and Saudi Arabia reduced supplies worldwide.

In May, an explosion shut down a Shell Oil Co. refinery in Norco, La. In June, fire swept a Texaco plant. The disasters cut 35 million to 40 million gallons of antifreeze from the U.S. market, which uses 200 million gallons annually, Waraich said.

″The real impact will be felt in October-November when John Public goes to the store for his coolant,″ said Waraich, whose company produces Peak, Advance and Full Force brands of antifreeze.

Some in the industry said some consumers and suppliers are hoarding antifreeze, making the crunch worse. Others said suppliers actually have restricted their orders to prevent hoarding.

Lonn Harlan, district manager of Rennoco Oil Co. in Omaha, a wholesale antifreeze distributor, said that due to higher prices from suppliers his company has boosted wholesale prices of antifreeze from $3.23 to $7.18 per gallon in the last four months.

Rennoco could have to boost prices to more than $11 a gallon wholesale by Jan. 1, Harlan said.

Target Stores’ antifreeze prices have climbed from $3.99 a gallon in June to $8 a gallon for Prestone and $6 for Xerex, said George Hite, vice president for public and consumer affairs.

K Mart stores will take a loss on antifreeze sales because of the shortage, said Don Thompson, sports-auto manager at the chain’s Omaha store.

Increased production is not possible in the short run, industry spokesmen said.

The Shell plant in Louisiana and the Texaco plant are not back at full production and the United States can not restore its lost supply of ethylene because it can not import the raw material, Waraich said. Importing ethylene gas requires special shipping terminals the United States does not have, he said.

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