17 November 2008 00:00 [Source: ICB]
2006: 4.47bn lbs (2m tonnes) 2007: 4.335bn lbs 2011: 4.69bn lbs, projected. Demand equals production plus imports (2006: 3m lbs 2007: 3m lbs) less exports (2006: 1.203bn lbs 2007: 1.106bn lbs). Source: ICIS Chemical Business US ITC
Historical (2002-2007): -1.1%/year (negative). Future: 2%/year through 2011. Source: ICIS Chemical Business
Historical (2002-2007): High, 71 cents/lb, spot, US Gulf, FOB (free on board). Export low, 19 cents/lb, same basis. Current: 68-72 cents/lb, same basis. Current contract pricing: 86-91 cents/lb, same basis. Source: ICIS pricing
Bisphenol-A (BPA), 45% phenolic resins, 28% caprolactam (capro), 11% alkylphenols (p-nonylphenol, p-dodecylphenol), 4% xylenols, 4% aniline, 2% miscellaneous (including adipic acid and salicylic acid), 6%. Source: ICIS Chemical Business
Phenol's demand is largely determined by its derivatives, particularly BPA and phenolic resins. These two derivatives respectively account 45% and 28% of phenol's demand.
The largest market for BPA is polycarbonate (PC) resins, which account for approximately 75% of US demand. PC resins consumed in automotive applications accounted for about 20% of the total demand. The resins are used in place of traditional materials such as metal and glass in automotive components. Glazing and sheet uses, such as architectural, security and transportation, make up another 20% of PC consumption. Optical media, including CDs and DVDs also account for 20% of the PC resin market. PC resin consumption in the optical media sector has been slowing however, as competing technologies (MP3 players, high-internet bandwidth and USB drives) take away some share of the electronic storage sector. The slowing economy has also softened BPA demand in all its application sectors.
Phenolic resins are chiefly used in wood products that are consumed in home construction - plywood and fibrous and granulated wood products. Demand for wood-based products is influenced by the strength of the construction industry and the overall health of the economy. This market sector closely tracks GDP growth and housing construction growth. The slump in the US housing market that began in 2006 and continues into 2008 has had a large negative impact on total phenolic resin consumption during 2004-2007, and will have even more of one this year.
Phenol demand is being adversely affected by the general economic slowdown and downturn in housing construction. Assuming a correction will begin by mid to late-2009, phenol growth demand for the forecast period is projected to be 2%/year. With crude oil now trading in the mid $60s/bbl range, benzene (and thus cumene) pricing should be stable for the short term, allowing producers to improve their margins.
|Blue Island Phenol||Blue Island, Illinois||95|
|Dakota Gasification||Beulah, North Dakota||35|
|Dow Chemical||Freeport, Texas||650|
|Emerald Performance Materials||Kalama, Washington||75|
|Georgia Gulf||Pasadena, Texas*||160|
|Georgia Gulf||Plaquemine, Louisiana||500|
|INEOS Phenol||Theodore, Alabama||1,200|
|Merisol USA||Houston, Texas||35|
|SABIC Innovative Plastics||Mount Vernon, Indiana||710|
|Shell Chemical||Deer Park, Texas||1,300|
SOURCE: ICIS CHEMICAL BUSINESS
*Plant has been idle since second quarter, 2002.
**350m lbs/year of plant's capacity is idle.
Nearly 98% of US phenol capacity is based on oxidation of cumene to form cumene hydroperoxide, which is then cleaved into phenol and acetone. Emerald uses a toluene oxidation process, producing benzoic acid as an intermediate. Merisol recovers phenol from petroleum caustic wash streams, and Dakota Gasification obtains phenol as a by-product of the company's coal gasification process.
In January this year, JLM Industries of Blue Island, Illinois, sold its cumene and phenol manufacturing facility to Blue Island Phenol, a company formed for the purpose of the acquisition. Under the terms of the deal, JLM will continue to manage the facility and market products produced at the plant. Blue Island Phenol is owned by Wisconsin-based Plastics Engineering.
In 2005 INEOS Phenol increased phenol capacity at Theodore, Alabama, by 8%, raising capacity to 1.2bn lbs/year. Then in 2006, Shell increased the capacity of its Deer Park, Texas, phenol plant by 10%, going to 1.3bn lbs/year from 1.2bn lbs/year. The SABIC Innovative Plastics location was a joint venture (JV) of CITGO, General Electric, and JLM Industries, before SABIC bought GE Advanced Materials. Merisol USA is a 50:50 JV between Texas-based Merichem and South Africa-based SASOL. In 2006, Sun Capital Partners acquired Noveon Kalama from Lubrizol and renamed it Emerald Performance Materials.
Profile last published May 23, 2005
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