Chemical profile: Toluene

03 March 2008 00:00  [Source: ICB]

USES

Toluene is used in large quantities as an octane booster in gasoline. Its main chemical use is to make benzene and xylenes. In the hydrodealkylation (HDA) process, toluene and hydrogen are reacted to make benzene. Toluene disproportionation (TDP) converts toluene to benzene and xylenes, while selective toluene disproportionation (STDP) produces a paraxylene (PX)-rich stream. Transalkylation (TA) produces xylenes from toluene and C9 aromatics.

Toluene is also used in solvents and to make toluene di-isocyanate (TDI) with minor uses in caprolactam (capro), nitrobenzene, benzoic acid and benzyl chloride.

The three grades are: TDI-grade of over 99% purity nitration grade (98.5%) for solvents and HDA/TDP plants and commercial grade (96%) for gasoline blending and HDA feedstock.

SUPPLY/DEMAND

Players say demand has been steady and supply is quite balanced. Most HDA units in Europe are currently operational, supported by the spread between toluene and benzene. There is additional interest at present for extra volumes in the US, where prices are higher than Europe. But the volatility of crude and gasoline in both regions is limiting export opportunities, although players expect the start of the US driving season in March to boost demand.

US-based consultancy DeWitt & Co. estimates that demand for toluene in Europe in 2007 was 2.38m tonnes, out of which 1.38m tonnes was converted to benzene and xylenes, and 526,000 tonnes was consumed by solvents.

PRICES

Toluene prices have been volatile, fluctuating with crude and gasoline values, which have hit new record highs in February. European contracts slipped by $5/tonne in February to $895-905/tonne. Spot prices in late February were firm at around $915-935/tonne.

TECHNOLOGY

Most toluene is produced from the catalytic reforming of naphtha or from pyrolysis gasoline (pygas) coproduced in the steam cracking of liquid feeds.

A very small amount is still produced from light oil formed by the carbonization of coal, while small quantities are recovered as a by-product in styrene manufacture. The Cyclar process, developed by BP and UOP, converts butanes and propanes in liquefied petroleum gas (LPG) to aromatics. So far, only one commercial plant has been built, in Saudi Arabia.

OUTLOOK

DeWitt expects demand growth in Europe to be positive, but low. Producers talk growth at less than GDP rates. Europe has excess capacity and exports are needed to keep the region balanced. However, with the buildup of capacity in Asia between 2008-2010, trade flows between Europe and Asia could change.

New plants are planned in China, Taiwan, Indonesia, Thailand and India. Two projects are also planned in Saudi Arabia and Iran. Demand in Europe will get a fillip next year when ExxonMobil starts up its new TDP unit in Rotterdam, the Netherlands.

MAJOR EUROPEAN TOLUENE CAPACITY*,'000 TONNES/year

Company	Location	Capacity
BASF	Mannheim, Germany	140
BP Refining & Petrochemicals	Lingen, Germany	60
CEPSA	Algeciras, Spain	200
ExxonMobil	Botlek, Netherlands	240
Fina Antwerp Olefins	Antwerp, Belgium	100
INA	Rijeka, Croatia	70
	Sisak, Croatia	88
INEOS Olefins	Dormagen, Germany	130
Kirishinefteorgsyntez	Kirishi, Russia	55
Lukoil Permnefteorgsyntez	Perm, Russia	60
MOL	Szazhalombatta, Hungary	110
Neftochim	Burgas, Bulgaria	50
NIS-Rafinerija	Pancevo, Serbia	50
Novopolotsk Oil Refinery	Novopolotsk, Belarus	60
Omsk Refinery	Omsk, Russia	80
PCK Schwedt	Schwedt, Germany	52
Petkim	Aliaga, Turkey	162
Petrogal	Oporto, Portugal	170
PKN Orlen	Plock, Poland	180
Polimeri Europa	Porto Marghera, Italy	50
	Priolo, Italy	240
Ryazan Refinery (TNK)	Ryazan, Russia	63
SABIC Europe	North Tees, UK	330
Shell	Godorf, Germany	130
	Heide, Germany	125
	Stanlow, UK	80
	Wesseling, Germany	100
Slovnaft	Bratislava, Slovakia	86
Syndial	Porto Torres, Italy	70

NOTE: * only plants over 50,000 tonnes/yearSOURCE: DEWITT & CO.

Profile last published December 6, 2004

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