Chemical Profile: BENZOIC ACID

10 November 2005 11:18 Source:ICIS Chemical Business

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BENZOIC ACID

March 21, 2005

PRODUCER CAPACITY*
Noveon Kalama, Kalama, Wash.

210

Velsicol, Chattanooga, Tenn.

75

Total

285



*Millions of pounds per year. Benzoic acid, a crystalline white solid, is produced commercially by partial oxidation of toluene. Most benzoic acid is consumed captively in the production of a variety of industrial chemicals. It is estimated that 105 million pounds or 50 percent of Noveon’s benzoic acid is used captively to produce phenol, in a second partial oxidation process. Noveon Kalama operates as a subsidiary of Lubrizol. In June 2004, Lubrizol Corp. acquired Noveon International from AEA Investors. Profile last published, 2/25/02; this revision, 3/21/05

DEMAND

2003: 130 million pounds; 2004: 134 million pounds; 2008: 150 million pounds, projected. Demand equals production plus imports (2003: 12 million pounds; 2004: 11 million pounds) less exports (2003: 19 million pounds; 2004: 18 million pounds).

The data exclude crude, unisolated benzoic acid used for Noveon’s production of phenol (about 105 million pounds).

GROWTH

Historical (1999-2004): 0.8 percent per year; Future: 3.0 percent per year through 2008.

PRICE

Historical (1999-2004): High, $0.99 per pound, list, tech., bgs., f.o.b. whse.; low, $0.63, same basis. Current: $1.05, same basis.

High crude oil prices and tight toluene supplies for the past two years have caused toluene pricing to jump from an average spot price of $1.00 per gallon in 2002, to a high of $2.70 in 2004. Benzoic acid consumers experienced a consequent series of price increases that began in 2003 and continued into January of this year.

USES

Benzoate plasticizers, 49 percent; sodium and potassium benzoates, 26 percent; benzoyl chloride, 12 percent; alkyd resins, 3 percent; n-butyl benzoate, 2 percent; miscellaneous, including pharmaceuticals and as a preservative in surface coatings, emulsions, polishes, waxes and liquid detergents, 8 percent.

STRENGTH

Benzoate plasticizers (primarily dibenzoate esters) are used mainly in polyvinyl acetate-based (PVAc) emulsion adhesives, caulks and sealants. Benzoates impart flexibility to PVAc emulsions and increase their adhesion to nonporous substrates such as film, foils and coated paper. Dibenzoates compete with phthalate plasticizers in these applications, but dibenzoates have better growth prospects than the phthalates, partly as a result of continuing environmental pressure on phthalates. This sector represents nearly 50 percent of benzoic acid’s demand, and it is the most robust, growing better than 4 percent, slightly ahead of GDP growth. Sodium and potassium benzoates are used as preservatives in a variety of foods and beverages. This segment matches GDP growth and accounts for about one quarter of benzoic acid’s demand.

WEAKNESS

Benzoic acid improves the hardness, gloss, adhesion and chemical resistance of alkyd resin surface coatings. Demand for alkyd surface coatings has been negatively influenced by clean air regulations limiting the level of volatile organic compounds (VOCs) in these products. Substitute coating technologies, particularly acrylic latexes and to a smaller degree epoxies, urethanes, polyesters and vinyls, are contributing to a slow decline of about 1 percent per year.

OUTLOOK

Benzoic acid will grow in concert with the general economy, primarily due to healthy demand for benzoate plasticizers. Growth for benzoic acid through 2008 is forecast at 3.0 percent per year. On the raw material side, toluene prices have declined from their high of nearly $2.70 per gallon earlier last year to about $2.00 per gallon, which should relieve pressure for further benzoic acid price increases. Benzoic acid capacity is comfortable as the industry is operating at less than 87 percent capacity, including benzoic acid manufactured as an intermediate for phenol.

By Mark Kirschner