DeWitt '05: Fundamental shift seen in world benzene trade

29 March 2005 23:52  [Source: ICIS news]

HOUSTON (CNI)--A fundamental shift in global benzene trade flow patterns is likely to take place in the next few years, according to Chuck Venezia of DeWitt & Co.

 

Speaking at a seminar on aromatics trade 2005-08 and logistics costs challenges, Venezia pointed out that the US was structurally short of approximately 693,000 tonne of benzene in 2004. US benzene imports totalled 910,000 tonne last year, mainly from South Korea (340,000 tonne), Brazil (224,000 tonne) and Canada (183,000 tonne).

 

Besides the US, Western Europe was also a net importer absorbing around 412,000 tonne of benzene last year. Most of this came from traditional sources such as the CIS, Eastern Europe and the Middle East. But higher European prices at times also attracted barrels from the US (33,700 tonne), Brazil (42,300 tonne) and Asia (24,000 tonne).

 

By the end of 2005, DeWitt projects that new Asian styrene and cumene/phenol capacity will deplete most of the region’s trade surplus marking the beginning of a major shift in trade patterns.

 

Asia is slated to add 2.7m tonne/year of styrene and 1m tonne/year of cumene capacities by the end of 2008. Furthermore, the Middle East will add 2.4m tonne/year of styrene between now and the end of 2008 and while ramping up another million.

 

Assuming all of this capacity is built on time, one would expect North American and European Union exports of these products to disappear, thus reducing the benzene deficits in each region, and in the case of the European Union, even creating a small surplus, said Venezia.

 

The US is expected to have a deficit of only 237,000 tonne in 2008 while Asia is expected to move from a surplus to a deficit of close to 500,000 tonne. These changes would have a significant impact on logistics and trade infrastructure.

 

By: Malini Hariharan
+65 6780 4359

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