BRUSSELS (ICIS)--Global benzene supply growth will trail demand in the coming years, while US styrene will remain cost competitive due to the ethylene advantage, Herbert Le Lorrain, global strategy manager for styrene and aromatics at Shell, said on Wednesday.
Speaking at the 12th ICIS World Aromatics and Derivatives conference in Brussels, Belgium, Le Lorrain touched upon some of the key challenges and opportunities that the aromatics market will face in the future.
With 35% of the world’s benzene supply derived from steam crackers, the impact of lighter feedstocks on pygas availability has already led to a 20% reduction in yields.
While excess benzene capacity and lower operating rates suggest ample supply, the tight availability of feedstock has had a significant impact on Europe and the US.
Le Lorrain also noted that on-purpose benzene production methods like hydrodealkylation (HDA), which converts toluene to benzene, have seen a sharp decline.
While up to 20% of global benzene supply in 1990 was derived from HDA production, this figure is now close to negligible as the economics between toluene and benzene no longer work.
In the US, the growth of diesel combined with a drop in gasoline demand will have further impact on benzene production.
“US benzene is reformer driven, and high octane gasoline and hydrogen output are the key priorities not petrochemical output,” Le Lorrain said.
The switch from gasoline to diesel will have a negative impact on benzene availability due to lower refining rates, and Asian reformers are geared more towards paraxylene (PX) production as opposed to benzene.
Meanwhile, the flow of styrene from the US into other regions is likely to continue, with 200,000 tonnes moving from the US to Europe by 2015. Asia is expected to pull an additional 300,000 tonnes by this time.
“It all hinges on shale gas in Europe and China,” Le Lorrain added, however. “It can be very difficult to predict the future.”