Price and market trends: US to be short on benzene but long xylenes

28 June 2013 09:58  [Source: ICB]

The US will become short on benzene and long on xylenes because of changes brought on by the advent of shale gas and tight oil, according to an ICIS consultant.

Much of the benzene in the US comes from catalytic reformers in refineries and from pyrolysis gas (pygas), which is produced from cracking naphtha, said Karl Bartholomew, vice president, Americas, for ICIS Consulting. He was speaking to the ICIS US Aromatics and Derivatives Conference in Houston, Texas, US.

Shale gas has led many US crackers have shifted from naphtha to ethane as a feedstock. Lighter feeds produce less pygas.


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The bulk of reformers are involved in gasoline production, so octane demand is a key consideration in determining how refiners operate their reformers.

The US is long in octane because of the nation's ethanol blending requirement. The US requires refiners to use ethanol as an octane booster, and this has lowered demand for reformer octane.

Plus, overall US demand for gasoline has fallen, and it is expected to remain flat for several years.

Refiners have reacted to the long octane market by operating their reformers at lower severity. This helps refineries manage costs, but also lowers aromatics production.

Reformers are also struggling with the effects of rising shale-gas production, Bartholomew said.

Reformers produce hydrogen as a co-product. However, lower cost natural gas is increasingly being used as a source of hydrogen. As a result, reformers are deriving less value from co-product hydrogen.

Benzene production is also being limited by the advent of tight oil, also called shale oil.

Refiners are using more tight oil, which has allowed them to rely less on higher cost imports.

The naphtha derived from tight oil typically has a higher paraffinic content, Bartholomew said. When reformers use this naphtha as a feedstock, they produce less benzene.

However, tight oil could favour xylenes production, Bartholomew said. In addition, running reformers at lower severity could also favour xylenes production.

As a result, the US could become long in xylenes, he said. Regarding toluene, the US should be in balance.

By: Al Greenwood
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