28 June 2013 09:59 [Source: ICB]
The US cost advantage in ethylene will more than offset its disadvantage in benzene, allowing it to export styrene to Asia, according to Randy Rabenhorst, a principal at US-based consultancy Nexant.
One of the processes for making styrene relies on benzene and ethylene as a feedstock, noted Rabenhorst at the ICIS US Aromatics and Derivatives Conference in Houston, Texas, US.
For ethylene, the advent of shale gas has increased supplies of ethane, which US crackers are increasingly using as a feedstock.
More US styrene could be headed to Asia
US COST ADVANTAGE
This has given US ethylene producers a cost advantage against much of the world, which relies on higher cost naphtha as a feedstock.
However, the same light-feed trend has reduced US production of benzene. In fact, the US will become short on benzene, in part, because crackers are switching from naphtha to ethane.
Despite the outlook for benzene, any cost disadvantage will be more than offset by the country's ethylene advantage, Rabenhorst said.
Consequently, the US is likely to import benzene from Asia as a feedstock for styrene, he said. The US will then ship that styrene back to Asia, where it will be used to make polystyrene (PS).
Global PS demand is likely to grow slowly because of competition from polypropylene (PP) and polyethylene terephthalate (PET), Rabenhorst said. The feedstock for PS, styrene, accounts for about half of benzene demand, he said.
Demand from other derivatives should grow much faster, although they make up a smaller market for benzene consumption.
Nitrobenzene demand should rise quickly, as it is used to make aniline, a feedstock for methyl di-p-phenylene isocyanate (MDI), Rabenhorst said. MDI, in turn, is used to make polyurethanes (PUs).
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