Chemical profile: benzene

20 January 2010 15:08  [Source: ICB]

CORRECTIONS: The original capacity table published in ICIS Chemical Business on January 18, 2010, and here, incorrectly listed Atofina (now part of Total) with 200,000 tonnes/year at Gonfreville, France. The plant is actually included in Total’s entry. Additionally, the Gexaro entry originally had one notation asterisk, not two. A corrected version follows.

USES
Benzene is used to produce several intermediates, including styrene, phenol, cyclohexane, aniline, maleic anhydride (MA), alkylbenzenes and chlorobenzenes.

It is also used to make anthraquinone and hydroquinone, benzene hexachloride, benzene sulfonic acid and other products in drugs, dyes, insecticides and plastics.

SUPPLY/DEMAND
Demand in Europe showed a significant decline in 2009 versus 2008, with the first quarter down substantially. Demand improved slightly later in the year but is still struggling as the downturn impacts derivative performance.

Closures downstream have permanently removed benzene-consuming capacity in Europe - some 345,000 tonne/year of polystyrene (PS) capacity shut in 2009 in the Netherlands, Spain, Germany and France. But, UK consultancy International eChem suspects that this loss is balanced or even outweighed by the loss of production from the shift to liquefied petroleum gas (LPG) on crackers (which yields less benzene).

PRICES
September 2009 saw the year's first fall in benzene contracts, as supply lengthened and arbitrage windows closed. Contracts plunged €168/tonne, then fell again by €71/tonne in October.

But values have since been forced up by supply issues and export opportunities, with January contracts jumping €189/tonne to €759/tonne. Spot deals in early January were in the range of $1,090-1,120/tonne CIF ARA.

Benzene's margin over naphtha has been exceptionally volatile in 2009, say players.

TECHNOLOGY
In Europe, the main source of benzene is from pyrolysis gasoline (pygas) co-produced in the steam cracking of naphtha, gasoil or condensates to make olefins.

Another source is the selective disproportionation of toluene (TDP) where benzene is coproduced in a paraxylene (PX)-rich xylenes stream. The gasoline pool is also an increasing source as stricter regulations limit the content of benzene/aromatics in gasoline.

A third, albeit high-cost, route is the hydrodealkylation (HDA) of toluene, but benzene prices need to be high enough to stimulate production. Benzene is also coproduced in the Cyclar process developed by UK producer BP and US technology firm UOP, which converts butanes and propanes into aromatics.

OUTLOOK
Benzene supply and pricing in Europe will continue to be affected by cracker and reformer operations, says global consultancy ChemSystems. Persistent high naphtha values will push cracker operators to choose cheaper and lighter feeds, reducing benzene yield and pressuring prices upwards.

UK-based research and consulting firm Wood Mackenzie forecasts world oversupply in benzene beyond 2015 as major new refining capacity goes online in the Middle East and Asia, outpacing demand growth for gasoline. This could provide opportunities for buyers in Europe, which is short of benzene, to access a cheap source of benzene and PX.

WEST EUROPEAN BENZENE CAPACITY* '000 TONNES/YEAR

Company	Location	Capacity
AP Feyzin	Feyzin, France	110
Arsol Aromatics	Gelsenkirchen, Germany	250
BASF	Antwerp, Belgium	250
	Ludwigshafen, Germany	320
Borealis	Porvoo, Finland	150
BPRP	Gelsenkirchen, Germany	410
CEPSA	Algeciras, Spain	245
	Huelva, Spain	400
ConocoPhillips	Immingham, UK	200
Dow Chemical	Bohlen, Germany	320
	Terneuzen, the Netherlands	915
ExxonMobil	Botlek, Netherlands	830
FinaAntwerp Olefins	Antwerp, Belgium	190
Gexaro**	Lavera, France	240
INEOS Olefins & Polymers	Grangemouth, UK	295
	Cologne, Germany	370
OMV	Burghausen, Germany	160
Polimeri Europa	Porto Marghera, Italy	110
	Priolo, Italy	440
Repsol YPF	Puertollano, Spain	125
	Tarragona, Spain	190
Sabic Europe	Geleen, the Netherlands	355
Sabic UK ­Petrochemicals	Wilton, UK	510
Shell	Godorf, Germany	510
	Moerdijk, the Netherlands	550
	Stanlow, UK	240
Shell & DEA Oil	Heide, Germany	120
	Wesseling, Germany	160
Syndial	Porto Torres, Italy	220
Total	Antwerp, Belgium	250
	Carling, France	325
	Gonfreville, France	360
* excludes plants under 100,000 tonnes/year ** Atofina/BP
Source: ICIS plants & projects

Profile last published March 12, 2007

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