Chemical profile: Benzene

16 February 2009 00:00  [Source: ICB]

By Mark Kirschner

DEMAND

2007: 2.76bn gals (10.45bn liters) 2008: 2.775bn gals 2012: 2.91bn gals, projected. Demand equals production plus imports (2007: 1.121bn gals 2008: 1.023bn gals) less exports (2007: 7m gals 2008: 11m gals). Sources: ICIS Chemical Business United States Census Bureau (USCB) United States International Trade Commission (USITC)

GROWTH

Historical (2003-2008): 1.5%/year. Future: 1.2%/year through 2012.

PRICE

Historical (2003-2008): Contract - High, $4.44/gal, US Gulf, FOB (free on board) low, $1.07/gal, same basis. Current, $1.34/gal, same basis. Spot - High, $4.58/gal, barge low, $0.66/gal, same basis. Current, $1.35-1.40/gal, same basis. Source: ICIS pricing

USES

Ethylbenzene (EB - for styrene), 52% cumene (for phenol), 22% cyclohexane, 15%, nitrobenzene (for aniline), 7% alkylbenzene, 2% chlorobenzene, 1% miscellaneous, 1%. Source: ICIS Chemical Business

MARKET PERSPECTIVE

EB production is the largest chemical outlet for benzene in the US. In 2008, it accounted for 52% of total benzene demand. Most EB is consumed in styrene, which in turn is used in polystyrene (PS), styrene copolymers, such as acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile resins and styrene-butadiene copolymer latexes, styrene butadiene rubber (SBR) and unsaturated polyester resins.

Historically, growth in PS had been good but it was hit hard by rise in benzene pricing, beginning in 2004, and then by the economic slowdown. The second-largest outlet for benzene, accounting for 22% of demand, is cumene, which is nearly all consumed in phenol production with acetone formed as a coproduct. Historically, demand for phenol was driven by phenolic resins, but this market has matured and been overtaken by bisphenol A (BPA).

The strong demand for polycarbonates (PCs), historically at 10%/year and above, has driven BPA production. The rising popularity of DVDs and CDs accounted for much of the growth of PCs, but this is now slowing to around 4%/year.

The third-largest outlet for benzene, accounting for 15% of demand, is cyclohexane which finds its way primarily into the nylon chain via caprolactam (capro) and adipic acid. Cyclohexane demand is growing only slowly as nylon-based products are sensitive to the general economy.

The fourth main derivative of benzene is nitrobenzene, which is used in aniline. This is one of the faster-growing derivatives of benzene, at 3.5%/year, driven by polyurethanes (PUs). Benzene is used to make a number of other chemical intermediates such as alkylbenzene used in detergents, maleic anhydride (MA) in unsaturated polyester resins and chlorobenzenes, in engineering polymers.

In the past few months, benzene fell from a high of $4.44/gal (September 2008 contract) to $1.01/gal (January 2009 contract), following declining crude oil. More recently, pricing firmed at $1.34/gal.

OUTLOOK

Though global benzene demand has slowed, mainly due to the global economic downturn, benzene supply is increasing with new refinery capacity being built in the Middle East and Asia. This is good news as the US has been a net benzene importer for many years and will continue to be so. Another source of new benzene supply will be benzene removed from the gasoline blending pool. US regulations require that the amount of benzene in gasoline be reduced from 1.2% to 0.6% by 2011. This is equivalent to about 800m gal/year. Demand growth for the forecast period is projected to be 1.2%/year.

US BENZENE CAPACITY, MILLIONS OF LBS/YEAR

Company	Location	Capacity
ALON USA	Big Spring, Texas	12
BASF FINA	Port Arthur, Texas	35
BP Chemicals	Texas City, Texas	230
Chalmette Refining	Chalmette, Louisiana	55
Chevron Phillips Chemical	Pascagoula, Mississippi Sweeny, Texas	250
ChevronTexaco	Richmond, California	40
CITGO	Corpus Christi, Texas; Lake Charles, Louisiana; Lemont, Illinois	165
ConocoPhillips	Alliance, Louisiana; Wood River, Illinois	125
Dow Chemical	Freeport, Texas; Plaquemine, Louisiana	300
ExxonMobil	Baton Rouge and Chalmette, Louisiana; Baytown and Beaumont, Texas	520
Flint Hills Resources	Corpus Christi and Port Arthur, Texas	310
Frontier El Dorado	El Dorado, Kansas	15
HOVENSA	St. Croix, US Virgin Islands	70
Husky Energy	Lima, Ohio	30
LyondellBasell	Alvin, Channelview and Corpus Christi, Texas	330
Lyondell-Citgo	Houston, Texas	50
Marathon Ashland Petroleum	Catlettsburg, Kentucky; Texas City, Texas	60
Shell Chemical	Deer Park, Texas	180
Sunoco	Marcus Hook and Philadelphia, Pennsylvania; Toledo, Ohio; Westville, New Jersey	120
Valero Energy	Corpus Christi and Three Rivers, Texas; Delaware City, Delaware	115
TOTAL		3,012

NOTES: Benzene produced from naphtha reforming, toluene hydrodealkylation or toluene disproportionation, and extraction from pyrolysis gasoline fractions derived from ethylene plant cracked naphthas or heavier feedstocks.

In November 2007, Flint Hills Resources, a wholly owned subsidiary of Koch Industries, acquired the chemicals and polymers business of Huntsman, completing Huntsman’s exit from commodity chemicals. Included in the deal was Huntsman’s Port Arthur facility with its olefins cracker, which has a benzene production capacity of 65m gals/year.

In 2004, Premcor purchased the Delaware City refinery of  Motiva Enterprises. The following year, Valero Energy acquired Premcor with its four refineries, two of which had benzene separation units – Delaware City, Delaware's 15m gals/year, and Lima, Ohio's, 30m gals/year. In 2007, Valero Energy sold the Lima, Ohio refinery to Husky Energy (Calgary, Alberta).

SOURCE: ICIS

Profile last published August 8, 2005

For the latest market prices and reports on more than 120 commodity chemicals from the leading independent pricing and market intelligence service, please visit ICIS pricing

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly