Chemical Profile - PHENOL
20 May 2002 00:00 [Source: ICB Americas]
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PHENOL May 20, 2002
|Dakota Gasification, Beulah,
|Dow, Freeport, Tex.
|Georgia Gulf, Pasadena,
|Georgia Gulf, Plaquemine,
|Ineos Phenol, Theodore,
|JLM, Blue Island, Ill.
|Merisol USA, Houston
|Mount Vernon Phenol Plant
Partnership, Mount Vernon, Ind.
|Noveon Kalama, Kalama,
|Shell Chemical, Deer Park,
|Sunoco, Haverhill, Ohio
*Millions of pounds per year. Nearly 98 percent of US phenol
capacity is based on oxidation of cumene
to form cumene
hydroperoxide, which is then cleaved into phenol and acetone
Noveon Kalama Inc. uses a toluene
oxidation process with benzoic
acid as an intermediate. Merisol USALLC recovers phenol from
petroleum caustic wash streams, and Dakota Gasification Company
obtains it as a by-product of the company's coal
process. The Mount Vernon Phenol Plant Partnership was established
in 1987 by GE Holding, 49 percent, Citgo Petroleum, 49 percent, and
JLM Industries, 2 percent. GE Plastics operates the plant at Mount
Vernon, Ind. Merisol USA is 50 percent owned by Merichem and 50
percent by Sasol of South Africa. In March 2000, Shell Chemical
Company added 500 million pounds at its Deer Park, Tex., plant. In
June 2000, Phenolchemie, part of Degussa-Hls, opened its 880
million pound plant at Theodore, Ala. Then, in May 2001, Ineos
Group acquired Phenolchemie. In February 2001, an investor group
comprised of AEA Investors Inc., an affiliate of DLJ Merchant
Banking Partners and DB Capital Partners Inc., acquired the
performance materials division of BFGoodrich. In June that year,
the former BFGoodrich performance chemicals segment, was named
Noveon Inc. Kalama Chemical had previously been part of
BFGood-rich's performance materials business. Sunoco acquired
Aristech Chemical in January 2001, from Mitsubishi Corp. The deal
did not include Aristech's acrylics business. Aristech had
increased phenol capacity from 700 million to 940 million pounds at
Haverhill, Ohio, in the fourth quarter of 1999. In July 2001,
Solutia Inc. and JLM Industries Inc. agreed to end a commercial
agreement to establish a new benzene-to-phenol plant because of
weak market conditions. The plant would have been at Solutia's
Pensacola, Fla., facility and would have used Solutia's AlphOx BtoP
technology. In March 2002, Georgia Gulf Corp. idled its 160 million
pound-per-year phenol plant at Pasadena, Tex., citing weak domestic
demand and excess industry capacity. The plant will be down for at
least six months. Frontier Oil and Refining Company recently closed
the 110 million pound-per-year phenol unit (and cumene) at El
Dorado, Kan., as the first step in increasing gasoline output.
Texaco Refining and Marketing Inc. originally owned the refinery.
In 1997, the plant became part of Equilon Enterprises LLC, a joint
venture between Shell Oil Products and Texaco Refining and
Marketing. Frontier bought the refinery in 1999. Profile last
published 3/29/99; this revision, 5/20/02.
Historical (1996-2001): High, 40.6 cents per pound, contract, US
Gulf, tanks, frt. equald.; low, 30.7 cents, same basis. Current:
36.6 cents, same basis.
Historical (1996-2001): 1.8 percent per year; Future: 3.0 percent
per year through 2005. The growth rate for the past five years
appears small and is because of the nearly 8 percent drop in demand
between 2000 and 2001. The average annual growth from 1995 to 2000
was 4.2 percent.
Bisphenol-A, 41 percent; phenolic resins, 28 percent; caprolactam
13 percent; alkylphenols, 5 percent; xylenols, 4 percent; aniline,
3 percent; miscellaneous, 6 percent.
2000: 4.87 billion pounds; 2001: 4.50 billion pounds; 2005: 5.07
billion pounds. Demand equals production plus imports, which were
119 million pounds in 2000, and 32 million pounds in 2001, less
exports, which were 583 million pounds in 2000 and 624 million
pounds in 2001.
The temporary closing of Georgia Gulf's plant at Pasadena,
Tex., and the departure of Frontier Oil from the phenol market has
eliminated 270 million pounds of capacity or about 4 percent of
capacity. This is helping to balance the oversupply situation and
raises the industry operating rate to nearly 75 percent.
The phenol market continues to be hurt by overcapacity, flat
pricing and weak demand. The market is yet another casualty of the
global economic downturn as demand for bisphenol-A, the leading use
for phenol, is down from reduced demand for polycarbonate and epoxy
resins. Before 2001, US polycarbonate had been enjoying growth of
almost 5 percent per year. Restoration of phenol demand growth
depends on economic recovery. By the beginning of this year,
producers were forced to cut back production to about 70 percent of
With the improving economy this year, phenol's derivatives
will begin a new market pull that will translate into a return to
growth for phenol. US phenol demand is projected to grow at 3
percent annually through 2005.
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