Benzene

13 November 2000 00:00  [Source: ICB]

Markets in western Europe and the Middle East are fundamentally oversupplied, leading to a trend towards moving material to deepsea markets

Supply/demand



About 450 000 tonne/year of extra benzene has been added to European supply from the new gasoline regulations limiting benzene content to 1% which came into force on 1 January. Several companies have invested in new extraction capacity to remove benzene from the gasoline pool. New export-oriented production has also come onstream in Saudi Arabia at Ibn Rushd and Saudi Chevron. Supply during the first half of this year has been tight because of operating problems across Europe, shortages in the US which reduced exports and pulled in European product, and production difficulties in Saudi. However, in quarter four supply is increasing and derivatives demand declining. European exports, which totalled 40 000 tonne in 1999, have surged to 160 000 tonne in 2000, of which 120 000 tonne went to the US, according to consultancy CMAI. West European production for the first nine months of 2000 is up by 4.3%, said CMAI, with consumption expected to show a maximum 5% rise.

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Uses



Benzene is an aromatic feedstock and more than half of its production feeds ethylbenzene/styrene demand. The second largest consumer is cumene followed by cyclohexane, aniline/nitrobenzene and alkylbenzene. Benzene is also left in refinery streams and used in gasoline as an octane enhancer although regulations now limit the benzene content to 1% in Europe.

Technology



The traditional method of manufacturing benzene from the distillation of light oils produced in coke manufacture has been overtaken. In Europe, the main source is from pyrolysis gasoline (pygas) coproduced in the steam cracking of naphtha, gasoil and condensates to make olefins. Other methods include hydrodealkylation (HDA) and the selective disproportionation of toluene (TDP). Benzene is coproduced in the BP/UOP Cyclar process converting propane/butane into aromatics. Ibn Rushd started up end 1999 the world's first commercial Cyclar unit producing 350 000 tonne/year.

Health and safety



Benzene is a clear, highly refractive, flammable liquid. It burns with a sooty flame and, because of its heavy vapours, flashback is an additional hazard. It is acutely toxic and can cause dizziness, nausea, rapid heart rate and unconsciousness. It is considered a carcinogen and long-term exposure has been shown to cause leukaemia.

Pricing



Benzene prices are heavily influenced by crude oil which hit a ten-year high of $37/bbl last month. The European contract price has risen in the first three quarters of 2000 but rolled over at E470/tonne into quarter four. Current spot prices are about $355-360/tonne cif NWE.

Outlook



Markets in western Europe and the Middle East are fundamentally oversupplied and there is expected to be more of a trend to move material into deepsea markets. The surplus from the Middle East, including Israel, Turkey and Iran, as well as Saudi, is about 800 000 tonne/year. Ibn Rushd's Cyclar plant at Yanbu is only running at about 60% because of benzene quality problems. The unit feeds Sadaf's new 500 000 tonne/year styrene plant at Al-Jubail and Ibn Rushd needs to import about 10 000 tonne/month until early next year. The unit will go down for engineering work for six weeks in quarter one.

There is another significant threat to Europe from the 2005 specifications for gasoline which reduces aromatics content to a maximum 35%. There is pressure on industry to meet the specifications early. Lyondell's 640 000 tonne/year styrene facility in Rotterdam, the Netherlands, will have a significant impact on consumption when it starts up in 2003.

WEST EUROPEAN BENZENE CAPACITY, '000 TONNE/YEAR



Company Location Capacity
Aral Gelsenkirchen, Germany 170
AtoFina Feyzin, France 110
Carling, France 300
Gonfreville, France 200
BASF Mannheim, Germany 320
Antwerp, Belgium 250
Borealis Porvoo, Finland 130
BP Grangemouth, UK 297
BSL Böhlen, Germany 320
Carboquimica Padua, Italy 20
Cepsa Algeciras, Spain 247
Huelva, Spain 170
Conoco Immingham, UK 200
Dow Terneuzen, Netherlands 900
DSM Geleen, Netherlands 350
EniChem Porto Marghera, Italy 110
Porto Torres, Italy 230
Priolo, Italy 390
Sarroch, Italy 45
Erdölchemie Cologne, Germany 240
ExxonMobil Botlek, Netherlands 600
Fina Antwerp Antwerp, Belgium 430
Olefins
Gexaro Lavéra, France 200
(AtoFina/BP)
Huntsman ICI Wilton, UK 433
OMV Burghausen, Germany 160
PCK Schwedt, Germany 65
Petrogal Oporto, Portugal 80
Repsol Puertollano, Spain 125
Petroleo
Rutgerswerke Zelzate, Belgium 60
RWE-DEA Heide, Germany 120
Wesseling, Germany 160
Shell Berre, France 85
Godorf, Germany 510
Stanlow, UK 240
Teer Erkner, Germany 38
TotalFina Elf Gonfreville, France 160
Wintershall Lingen, Germany 75
Veba Öel Gelsenkirchen, Germany 380
Source: DeWitt






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