Phenol

22 January 2001 00:00  [Source: ICB]

Global demand is set to grow by 3-4%/year, which should be met by new plants planned in Thailand and SingaporeUpdated from product profile, ECN 17 MAY 1999

Uses



Bisphenol-A (BPA), used in polycarbonate and epoxy resins, has overtaken phenolic resins as the major consumer with 37% of total demand. Phenolic resins, used to make adhesives and laminated boards, is next, accounting for about 34%. About 15% of phenol is used in the fibre intermediate, caprolactam. Strong growth is projected, although from a relatively small base, in ortho-xylenol used in polyphenylene oxide engineering plastics. Other derivatives are alkylphenols, adipic acid, aniline, chlorinated phenols and diphenols. It is also used in pharmaceuticals, acetylsalicylic acid and paracetamol.

Supply/demand



Over 90% of capacity is concentrated in Western Europe, Asia and North America. West European capacity totals 2.35m tonne/year, with over 1.8m tonne/year available to the merchant market. Germany, Belgium and the Netherlands absorb over 50% of European production. US production totals 2.8m tonne/year, and new capacities onstream last year moved it to a net exporter with over half of its capacity serving merchant markets. Asia, a net importer, has a total capacity of 1.5m tonne/year with nearly 66% consumed internally by derivatives, although expansions will double the region's merchant capacity in the next few years. Global markets are oversupplied. However, technical problems at EniChem in Porto Torres during 2000 restricted European supply, and availability is tight in early 2001 but should loosen. BPA demand is strong, but players report weaker phenolic resins consumption, particularly in the US where housing and automotive markets have slowed.

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Pricing



Most European contracts dropped by about DM40/tonne in January, reflecting lower benzene and propylene feedstock costs, although some accounts have rolled over. The average monthly contract price is quoted at DM1850/tonne FD, before discounts. US suppliers are seeking a 4 cent/lb rise in January on contract prices of 32.5-36.5 cent/lb.

Technology



Cumene-based technology is the dominant process and is considered to be the most economic, supported by demand for coproduct acetone. About 6 tonne of acetone is made for every 10 tonne of phenol. A few producers use an older process involving the hydrolysis of chlorobenzene. A third route is the liquid phase oxidation of toluene, developed and operated by DSM. Recent research has concentrated on technologies avoiding the coproduction of acetone. A one-step route from benzene has been developed by Russia's Boreskov Institute of Catalysis, and Solutia will commercialise the Alphox technology in a new plant in Pensacola, US, due onstream late 2003. Mitsui Petrochemical has also developed a new process where benzene is partially hydrogenated to cyclohexane, followed by conversion to cyclohexanol and dehydrogenation to phenol.

Health and safety



Pure phenol occurs as colourless to yellow crystals which turn pink on exposure to light and air. It is solid at ambient temperatures and is normally sold in bulk quantities as a heated liquid. It is moderately soluble in water. It reacts with oxidants, causing a fire and explosion hazard and forms toxic sooty fumes when heated. Its vapour is corrosive to body tissues and poisoning can occur by skin absorption, inhalation or ingestion.

Outlook



Phenol demand worldwide is expected to grow at 3-4%/year. Global demand growth for BPA is estimated at 7-8%/year, with phenolic resins at just 1-2%/year. Players expect supply/demand to become more balanced within the next two years as markets digest new capacity. Debottleneckings at Ertisa (due quarter one) and EniChem (completed) will feed GE Plastics' new BPA/PC capacity in Spain. Caprolactam Leuna's expansion in quarter three will feed Radici's new adipic acid output. Phenolchemie still plans a 400 000 tonne/year plant in Thailand. Mitsui will bring onstream a 200 000 tonne/year unit in Singapore in September, and is also looking at Thailand or Singapore for an additional plant by 2004-05.

MAJOR GLOBAL PHENOL CAPACITY, '000 TONNE/YEAR



Producer Location Capacity


Borealis Porvoo, Finland 130


Caprolactam Leuna Leuna, Germany 130


Chiba Phenol Chiba, Japan 200


Dow Chemical Freeport, Texas, US 295


DSM Botlek, Netherlands 110


EniChem Mantova, Italy 295


Porto Torres, Italy 180


Ertisa Huelva, Spain 320


Formosa Plastics Mailiao, Taiwan 200


GE Plastics Mount Vernon, Indiana, US 320


Georgia Gulf Pasadena, Texas, US 73


Plaquemine, Louisiana, US 227


Kumho P&B Yeochon, South Korea 120


Mitsubishi Chemicals Kashima, Japan 180


Mitsui Chemicals Chiba, Japan 190


Osaka, Japan 200


Nippon Steel Tobata, Japan 120


Phenolchemie Theodore, Alabama, US 400


Antwerp, Belgium 420


Gladbeck, Germany 630


Rhodia Paulinia, Brazil 130


Roussillon, France 110


Shell Deer Park, Texas, US 545


Sunoco Frankford, Pennsylvania, US 460


Haverhill, Ohio, US 430


Taiwan Prosperity Lin Yuan, Taiwan 120






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