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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By: Elaine Burridge
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