Ethylene glycol
26 June 2000 00:00 [Source: ICB]
The short-term global outlook for EG is bleak, with the
market not expected to strengthen until 2002-03
Uses
Ethylene glycol's (EG) principle applications are as an
intermediate in the production of polyesters and as an automotive
antifreeze. Around 55% of the world's EG production is used in
polyester fibres, 16% in PET resin, 15% in antifreeze, 6% in other
applications and 3% in other polyesters.
Supply & demand
Around 12.3m tonne of ethylene glycol is expected to be produced
globally this year even though the world has capacity to produce
14.5m tonne/year, according to UK consultancy Tecnon UK. New plants
were commissioned in 1999 in Taiwan and India. This year Sabic
commissioned its 410 000 tonne/year EG plant at the Yanpet II site
in May. However, the new capacity has still to have an impact on
world supply, as the existing EG unit at the site has been taken
off-line until the cracker at the site is commissioned in June.
Although there is the potential to expand existing European
capacity through debottleneckings, no major projects have been
announced. World EG demand is expected to continue to grow at a
rate of 5%/year to around 2007.
Technology
The only commercial route to EG is by the hydrolysis of ethylene
oxide (EO). The early manufacture of EO via ethylene chlorohydrin
has been superseded by the direct oxidation of ethylene in the
presence of oxygen or air and a silver oxide catalyst. A crude EG
mixture is then produced by reacting the EO with water under
pressure. Fractional distillation under vacuum is used to separate
the monoethylene glycol from the higher glycols. Researchers have
looked at other processes such as the reaction of ethylene and
carbon dioxide to ethylene carbonate followed by hydrolysis, and
the direct oxidation of ethylene to glycol acetate anhydride which
can be hydrolysed to EG and acetic acid.
Health & safety
Liquid EG may cause slight irritation to eyes but has no major
effect on the skin. Vapours may cause irritation to the eyes, nose
and throat. Glycols are poisonous if ingested. EG is a stable,
non-corrosive liquid which, while combustible, is not
flammable.
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Prices
West European quarter two contract prices in Europe were agreed
at E700/tonne, up from E580/tonne the previous quarter. Producers
are targeting rollover prices or a slight increase for quarter
three based on the first ethylene quarter three contract which was
also settled at a rollover. On the spot market prices as low as
DM1150-1160/tonne have been seen for T2 Russian material, well
below the current contract level.
In Asia prices have come under pressure in recent months. July
contract nominations have been made at $580/tonne CFR which
compares to prices of $650/tonne CFR for May and $630/tonne CFR for
June. Players blame the slump in Asian prices on overcapacity in
downstream polyester markets. Asian spot prices are even weaker at
around $530/tonne CFR China. The situation is likely to worsen once
more new capacity is commissioned in Saudi Arabia, Asia and
Canada.
| Company |
Location |
Capacity |
| BASF |
Antwerp, Belgium |
270 |
| BP Amoco |
Lavéra, France |
10 |
| Clariant |
Gendorf, Germany |
100 |
| Dow Chemical |
Terneuzen, |
145 |
| Erdölchemie |
Cologne, Germany |
150 |
| Ineos |
Antwerp, Belgium |
240 |
| Union Carbide |
Wilton, UK |
200 |
| Arpechim |
Pitesti, Romania |
30 |
| Neftezhim** |
Dzerzhinsk, Russia |
130 |
| Kazanorgsyntez |
Kazan, Russia |
35 |
| Naftam |
Novopolotsk, Belarus |
20 |
| Neftochim |
Burgas, Bulgaria |
96 |
| Nizhnekamskneftekhim |
Nizhnekamsk, Russia |
76 |
| Petrobrazi |
Brazi, Romania |
80 |
| Petrochemia Plock |
Plock, Poland |
95 |
| Petrokam |
Nizhnekamsk, Russia |
60 |
| Salavatnefteorgsyntez |
Salavat, Russia |
25 |
| Slovnaft |
Bratislava, Slovakia |
42 |
Outlook
The short-term global outlook for EG is bleak, with three new
units scheduled to come onstream in the second half of this year.
Shell is scheduled to commission a new 400 000 tonne/year unit in
Scotford, Canada, in July and this will be followed by the
commissioning of the 500 000 tonne/year Sharq III plant in Al
Jubail, Saudi Arabia, in July-August. Nan Chung's new plant in
Taiwan, although complete since February, is not expected onstream
until September this year.
With new Saudi material predominantly targeted at Asia, prices
here are expected to weaken further. As a result Russian exports to
Europe are expected to increase.
Tecnon UK envisages a difficult market for EG players over the
next few years. However, by end 2002-03 the market is expected to
strengthen. New capacity is planned in Al-Jubail (450 000
tonne/year for Sabic) and Iran (400 000 tonne/year for Maroon
Petrochemicals) for 2002-03, to coincide with the upturn.
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