Maleic anhydride

08 April 2002 00:00  [Source: ICB]

European demand is weak and production rates have been cut. Players are hoping growth will recover in the second half of this year

Uses



Maleic anhydride (MA)'s main use, with over 50% of consumption, is unsaturated polyester resins (upr). The second biggest outlet, and the fastest growing, is 1,4 butanediol (BDO) and derivatives tetrahydrofuran (THF) and gamma-butyrolactone (GBL). Other uses for MA are in plasticisers, surface coatings, agrochemicals, lubricants, fumaric acid and malic acid. MA is available in either liquid (molten) or solid (flake) form.

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Supply/demand



The European market remains depressed with weak demand and structural oversupply. Operating rates have been cut to match reduced demand and some benzene-fed lines have stopped production. Less Asian imports are also present. Last year's slowdown deepened in quarter four and into quarter one and prices slumped by an average 10%. Demand growth in Europe last year for upr was at best flat or showed a slight decline, but is expected to recover this year and turn in growth of 1%. Players report no firm signs yet of any improvement in demand but are optimistic for a better second half year. BASF's acquisition of Sisas in July 2001 has also impacted the market, as improved operations at the plant in Feluy, Belgium, led to product appearing on the merchant market, pressuring prices and igniting fresh competition for sales. Completion of PPM Ventures' purchase of Lonza's polymer intermediates business has been delayed to first half 2002.

Pricing



Europe settles contracts on both a quarterly and monthly basis. The first quarter contract is reported in the range E800-840/tonne with the March monthly settlement slightly lower. Producers will seek a price increase in April and quarter two to restore margins which are very low and have worsened recently as benzene feedstock costs soar. An initial second quarter benzene contract has settled, up by E161/tonne. Butane prices are also rising as crude oil and natural gas values move up.

Technology



MA is produced by the oxidation of benzene or butane. Although the butane-based process is said to have superior economics and is the preferred route, Lonza claims its fixed bed benzene route is competitive in low cost revamps and medium-sized plants. MA can be made from butane in either fixed or fluidised bed processes. Integrated butane-to-BDO technologies have been developed by Huntsman and BASF with Kvaerner, and BP/Lurgi. Scientific Design has developed chloride-free catalysts for MA production in fixed bed reactors. The catalysts are being toll-manufactured by Lonza. BOC Gases and Mitsubishi Chemical have developed a new technology, Petrox, which has been operated on a large-scale pilot plant in Japan. The process uses a selective hydrocarbon separation system to recover and recycle unreacted butane and allows MA to be produced at low butane conversion to maximise selectivity and yield. BOC claims reductions of 10% in capital costs and 20% in raw material costs.

Health and safety



MA occurs as white crystalline flakes which have a strong acrid odour. A decomposition-polymerisation explosion hazard can occur in the presence of alkalis at temperatures above 150ûC. MA is toxic and an irritant to the skin and mucous membranes.

Outlook



Asia, particularly China, is the main region for future growth. Chinese demand for upr is rising and new upr plants are due to start production in 2002/2003, requiring more MA. The Middle East is also a growing market and Saudi Arabia and the UAE have increasing import requirements. Huntsman's joint venture MA/BDO plant in Saudi Arabia is due onstream in second quarter 2004, but its 41 000 tonne/year Mexican project, which was due end 2000, is now on hold. BDO growth is still forecast at double digit rates. Future plant closures in Europe are still considered a possibility.

MALEIC ANHYDRIDE CAPACITY, '000 TONNE/YEAR



Company Location Capacity
Aekyung Petrochemical
Ulsan, South Korea 8
Ashland Neal, West Virginia, US 43
Neville Island,
Pennsylvania, US 20*
Bartek Stoney Creek, 27
Chemical Ontario, Canada
BASF Feluy, Belgium 225
Ludwigshafen, Germany 3
Bayer Baytown, Texas, US 60
BP Joliet, Illinois, US 45
Condea-Huntsman
Moers, Germany 56
Cray Valley Drocourt, France 15
Derivados Maleicos
Puebla, Mexico 7.5
DSM Linz, Austria 36
Grand Union Lin Yuan, Taiwan 25
Huntsman Pensacola, Florida, US 110
KBK Lukavac, Bosnia 10
Korea PTG Ulsan, South Korea 25
Lonza Ravenna, Italy 50
Bergamo, Italy 36
MOL Szazhalombatta, Hungary 13
Orgachim JSC Ruse, Bulgaria 1
Pankang Industrial
Panjin, China 10
Petrobrazi Brazi, Romania 12
Polioli, Italy Vercelli, Italy 36
PT Justus Sakti Raya
Jakarta, Indonesia 14
PT Petrowidada
Gresik, Indonesia 1.8
Repsol YPF Ensenada, Argentina 17
Shandong Shengli Oilfield Petrochemical
Dongying, China 15
Tasco Chemical
Lin Yuan, Taiwan 20
TCL Industries Teluk Kalung, Malaysia 35
Yongsan Chemicals
Ulsan, South Korea 40
Zaklady Azotowe Kedzierzyn
Kedzierzyn-Kozle, Poland 7


* idled since Nov 2001Source: ECN/CNI





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