28 April 2008 00:00 [Source: ICB]
Orthoxylene (OX) is the second largest of the three commercial isomers of xylene. Almost all OX output is consumed in making phthalic anhydride (PA), which is used in phthalate plasticizers - primarily dioctyl phthalate (DOP) - for polyvinyl chloride (PVC), as well as unsaturated polyesters and alkyd resins.
Small quantities are used in solvent applications and to make bactericides, soya bean herbicides and lube oil additives. A new outlet is in high-performance polymer, polyethylene naphthalate (PEN).
European producers and buyers say 2007 was a fantastic year for PA demand. However, suppliers say demand is slower than expected in 2008 because of the economic slowdown, but is still fair, with balanced supply.
The second quarter is traditionally the peak buying season, but players say the expected pick up is still not in sight and growth this year is expected to be slower than in 2007.
Consumption in eastern Europe and Russia has been strong due to a thriving construction industry
Prices are influenced to a large degree by gasoline prices, which have consistently hit record levels in recent months. Contract levels have fluctuated as gasoline and the wider energy complex influenced negotiations. Prices rose in January by €40/tonne to €760/tonne, but dropped in February by €10/tonne in line with buyer sentiment and lower gasoline values
Rising upstream costs pushed up contracts again in March by €40/tonne to €790/tonne, and in April by €30/tonne to €820/tonne. Producers have not managed to improve margins, but say they are reasonable. Spot numbers firmed during the month to $1,160-1,180 tonne, but with no deals.
Mixed xylenes are produced by high-severity catalytic reforming of naphtha from which the C8 stream contains orth-, meta-, and paraxylenes (PX), and ethylbenzene.
Xylenes are also obtained from the pyrolysis gas (pygas) stream in a naphtha steam cracker and by toluene disproportionation. The xylenes are passed through a splitter where the bottom stream, with a targeted amount of OX, is sent to a distillation column to produce high-purity product.
HEALTH AND SAFETY
OX is a clear, colorless liquid with an aromatic odor. It is toxic and flammable and flashback can occur as its vapors are heavier than air. It reacts violently with strong oxidants causing a fire and explosion hazard.
Vapors can irritate the eyes, nose and throat. High levels can cause dizziness and lead to unconsciousness and may be fatal.
Future demand growth in Western Europe is expected to be around 1%/year. Growth in Central and Eastern Europe is higher at about 2%/year, due primarily to a very active construction program.
No major investment is planned in Europe, where little change in the supply/demand balance is expected in the short to medium term. PKN Orlen is building a 40,000 tonne/year plant in Plock, Poland, as part of a proposed PX/purified terephthalic acid (PTA) project that is due to start production in 2009.
Other projects are planned in China, Singapore and Taiwan beyond 2010.
EUROPEAN ORTHOXYLENE CAPACITY, '000 TONNES/YEAR
|BP Refining & Petochemicals||Gelsenkirchen, Germany||70|
|Galp Chemical||Oporto, Portugal||50|
|Lukoil Neftochim Bourgas||Burgas, Bulgaria||20|
|Omsk Refinery||Omsk, Russia||165|
|PCK Raffinerie||Schwedt, Germany||40|
|Polimeri Europa||Priolo, Italy||70|
|PKN Orlen||Plock, Poland||10|
|Shell & DEA Oil||Heide, Germany||15|
|Total Petrochemicals||Gonfreville, France||110|
Profile last published May 2, 2005
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