|SIn the short term, as U.S. product
specifications become more stringent than in many other areas of the world,
the number of available import sources is likely to diminish, which in turn,
all else being equal, would increase the cost of imports.
|SFurthermore, growing demand in the rest of the
world where less stringent product specifications exist, could provide
markets for refiners that previously supplied the United States.
|SBut if margins increase in the Northeast (the
major product import area), then an opportunity arises for the large number
of importers who have supplied that market historically to figure out a way
to take advantage of the new situation.
|SThat is, a shortfall in import availability
may not be a lasting problem. If more imports are needed, especially at an
attractive price, they will be found.
And if import prices remain high enough for a long enough period of
time, then we should see increased capacity growth in the United States, or
new, more price-competitive import sources will emerge.
|SAlthough factors in the short term may improve
the competitive position of U.S. capacity, will that situation be sustained
over the long term?