19 July 1999 00:00 [Source: ICB]
Although toluene demand is forecast to grow on average by
2.13%/year between 1997 and 2002, Europe's 2005 limits on aromatics
in gasoline could lead to oversupply.
Toluene supply/demand balance and pricing is driven more by
gasoline values than petrochemical demand. When petrochemical
demand is poor, toluene extraction from pygas or reformate can be
reduced and the product retained in gasoline. Extracted toluene can
also be back-blended into gasoline. The cost of toluene extraction
from refinery streams is estimated by DeWitt at only $10-15/tonne.
Gasoline blend value therefore always puts a floor to toluene price
In Europe demand for toluene for petrochemical use has
fluctuated from as high as 2.1m tonne in 1996 when demand from HDA
units was high, to current levels of 1.7m tonne. DeWitt estimates
European toluene extraction capacity at around 2.16m
Toluene is used in large quantities as an octane booster in
gasoline but most of that portion is never removed from refinery
streams. Its petrochemical uses are as a feedstock for xylenes
using disproportionation technologies - around 24%, for benzene
through hydrodealkylation, once the major use but now only 14% of
demand; 9% is used in phenol production; 18% in toluene
di-isocyanates; and 22% in solvent use.
The original source of toluene from coke-oven gas has been
replaced by pyrolysis gasoline co-produced in the steamcracking of
liquid feeds or the catalytic reforming of naphthas. The rich
aromatics stream is then fed to a solvent extraction unit and
fractionation columns to separate the benzene, toluene and mixed
xylenes. Toluene could also be obtained from the aromatics produced
from propane/butane in the BP/UOP Cyclar process.
Health & safety
Exposure to toluene can irritate the nose, throat and eyes while
higher levels can cause dizziness and lightheadedness. Repeated
exposure can damage bone marrow, the liver and kidneys. Toluene is
flammable and poisonous gases are produced in a fire.
Reduced HDA use has diminished the price link with benzene and
in recent years there have been periods when toluene prices have
risen above benzene, particularly in the run up to summer when
octane demand increases. Toluene prices are also closely linked to
crude and gasoline values, which accounts for the steep rise in the
past four months from spot numbers of $165/tonne fob Rotterdam to
the current $230-240/tonne. Toluene contracts for the third quarter
at E246/tonne fob Rotterdam are a full E67/tonne above quarter two
The increasing availability of benzene from other processes
limits the usefulness of HDA - an older less economic process,
although for some European sites it is an integral part of their
production configuration and therefore likely to continue. However,
the outlook for demand from the selective toluene
disproportionation processes is positive.
Although toluene use in petrochemical production in Europe fell
by around 2.27%/year between 1994 and 1997, DeWitt estimates demand
will grow on average by 2.13% between 1997 and 2002. One big
uncertainty is the impact of Europe's 2005 limits on aromatics in
gasoline. If refiners adopt 2005 gasoline specifications early this
could lead to additional toluene volumes coming onto the European
marketplace. The other major driver of demand and pricing will be a
pickup in global paraxylene demand.
EUROPEAN TOLUENE CAPACITY,'000 TONNE/YEAR
||Porto Marghera, Italy
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