Chemical Profile Toluene

05 May 2003 00:00  [Source: ICB Americas]

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TOLUENE    May 5, 2003



Atofina Petrochemicals, Port Arthur, Tex.


BP Chemicals, Texas City, Tex.


Chalmette Refining, Chalmette, La.


Citgo, Corpus Christi, Tex.; Lemont, Ill.


Clark Refining and Marketing, Lima, Ohio


Chevron Phillips Chemical, Port Arthur, Tex.


Chevron Phillips Chemical Sweeny, Tex.; Guayama, P.R.


Dow Chemical, Plaquemine, La.


El Paso Energy, Corpus Christi, Tex.;
Westville, N.J.


Equistar Chemicals, Alvin, Tex.; Channelview, Tex.; Corpus Christi, Tex.


ExxonMobil, Baton Rouge, La.; Baytown, Tex., Beaumont, Tex.


Flint Hills Resources, Corpus Christi, Tex.


Frontier El Dorado Refining, El Dorado, Kan.


Hovensa, St. Croix, V.I.


Lyondell-Citgo Refining, Houston


Marathon Ashland Petroleum, Catlettsburg, Ky.; Texas City, Tex.


Shell Chemical, Deer Park, Tex.


Sunoco, Marcus Hook, Pa.; Philadelphia; Toledo, Ohio


Tosco, Alliance, La.


Valero Energy, Three Rivers, Tex.


By-product toluene from styrene production:
six sites




*Millions of gallons per year capacity of toluene recovered from catalytically reformed refinery streams (94 percent), pyrolysis gasoline derived from steam cracking of hydrocarbons to produce ethylene and propylene (5 percent) and as a by-product of styrene manufacture from ethylbenzene (1 percent). Most toluene produced, however, is not isolated from the various refinery streams, but blended into the gasoline pool. Companies that have the capability to obtain toluene as a by-product of styrene manufacture are: BP at Texas City, Tex.; CP Chem at St. James, La.; Cos-Mar Company at Carville, La.; Dow at Freeport, Tex.; Nova Chemicals at Bayport, Tex.; and Sterling Chemicals at Texas City, Tex. Three grades of toluene are produced: (1) TDI grade, toluene content 99+ percent with distillation range 1 degree Celsius; (2) nitration grade, toluene content 98.5 to 100 percent with distillation range 1 degree Celsius; and (3) commercial grade, toluene content 96 percent with distillation range 2 degrees Celsius. Amoco merged with British Petroleum to become BP Amoco in 1998. In July 2000, BP Amoco Chemicals reverted to the name BP Chemicals after BP Amoco decided to adopt a new unified global brand, centered on the name BP. Atofina, the chemicals branch of the Oil Group TotalFinaElf, was created in April 2000 from the merger of the chemical and petrochemicals activities of TotalFina and Elf Aquitaine. Chevron and Phillips merged their chemical operations in 2000, forming Chevron Phillips Chemical Company LP. Flint Hills Resources is a wholly owned subsidiary of Koch Industries. In September 2000, BP Amoco sold its Alliance refinery, with the associate toluene unit in Belle Chasse, Louisiana to Tosco Corp. In February, 2001 Coastal Corp., with its Corpus Christi, Tex., and Westville, N.J., refineries, was merged into El Paso Energy. At the end of 2001, Valero Energy acquired Ultramar Diamond Shamrock (UDS), and with it, UDS's refinery and toluene unit at Three Rivers, Tex. Exxon and Mobil merged in 1999 to form a new entity, ExxonMobil. In 1999, Frontier Oil acquired the El Dorado, Kan., refinery and its associate toluene production unit, formerly owned by Equilon Enterprises (now Shell Oil Products US). Equistar Chemicals is the joint venture that Lyondell Petrochemicals and Millennium Chemicals formed in 1997. In 1998, Occidental Chemical merged its olefin and derivatives business, including toluene, into Equistar. In 2002, Lyondell acquired Occidental's 29.5 percent share of Equistar, with Occidental making an equity investment position in Lyondell, bringing Lyondell's ownership interest in Equistar to 70.5 percent and Millennium Chemicals' to 29.5 percent. Chalmette Refining is the joint venture of ExxonMobil and PDVSA (Petróleos de Venezuela, S.A.), formed in 1997. Citgo is under PDV America Inc., a wholly owned subsidiary of PDVSA. Lyondell-Citgo Refining is a joint venture between Lyondell and PDVSA. Hovensa is a joint venture of Amerada Hess and PDVSA. Marathon Ashland Petroleum is a joint venture between USX Marathon and Ashland, holding Ashland's spun-off refineries, created in 1997. Profile last published 10/23/00; this revision 5/5/03.

2001: 1.244 billion gallons; 2002: 1.568 billion gallons; 2006: 1.710 billion gallons. Demand equals production plus imports, which were 94 million gallons in 2001 and 87 million gallons in 2002, less exports, which were 30 million gallons in 2001 and 12 million gallons in 2002.

Historical (1998-2002): High, $1.25 per gallon, nitration, Gulf, barges, spot; low, 51 cents, same basis. Current: $1.30, same basis.

Historical (1998-2002): 1.9 percent per year; Future: 2.2 percent per year through 2003.


Benzene by toluene hydrodealkylation (HAD) and toluene disproportionation (TDP), 50 percent; xylene by TDP, 20 percent; solvents, 12 percent; toluene diisocyanate (TDI), 8 percent; miscellaneous chemical uses (including benzoic acid, benzyl chloride, benzaldehyde, and toluene sulfonic acid), 10 percent.

Since mid-2002, strong demand from the gasoline sector and unscheduled downtime for several plants caused the market to tighten, and prices to increase above $1.00 per gallon. Benzene and xylene are the primary growth segments. Here, it is anticipated that HAD will decline and TDC will increase because of strong growing demand for paraxylene. Paraxylene margins improved in the last quarter for the first time after five years of decline. The market pull is largely the result of improving polyester demand.

Toluene demand in solvent applications will continue to weaken because of environmental and health regulations restricting solvent emissions. Toluene is positioned as a weak active solvent. Stronger oxygenated solvents (esters and ketones) are becoming favored in toluene's place. Toluene for TDI has been down for the past couple of years, following the decline in GDP (gross domestic product) growth, but in late 2002, this sector appeared to be showing renewed strength.

The near-term outlook for toluene is guardedly encouraging. Benzene demand has recovered from its previously depressed state, primarily because of downstream phenol derivatives' demand. Paraxylene likewise has become stronger and is pulling for more toluene. US demand for toluene is currently growing at 2.2 percent annually, and global growth is somewhat higher. No new toluene plants are currently planned but several TDI projects are under way in Asia Pacific, which will further stimulate toluene demand. US capacity is more than adequate to meet the growing demand for the near future.

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