OUTLOOK ’22: Asia benzene rides on optimism from new start-ups despite Omicron worries

Angeline Soh

22-Dec-2021

SINGAPORE (ICIS)–The sentiment in Asia’s benzene market for the first half of 2022 remains cautiously optimistic on concerns over the impact of the spread of the Omicron coronavirus variant amid a slew of new regional capacity start-ups in derivative sectors.

Market players have set realistic expectations given the fluctuating and ever-changing economic forecasts and state-imposed restrictions due to Omicron.

“In Q4 2021, some start-ups in China were delayed due to the dual control policy. For 2022, we are worried about potential delays should there be lockdowns as Omicron spreads,” said a China-based importer.

The International Energy Agency (IEA) earlier in December lowered its Q1 crude demand forecast by 600,000 barrel per day (bbl/day). This follows the swift and extensive movement control across Asia and Europe, despite Omicron’s relatively new emergence.

China’s Zhejiang has issued a shutdown of factories affecting production of a wide range of products – from medicine to chemicals such as intermediates, polyesters, dye stuff and agents.

In the near-term, the upcoming Winter Olympics could result in state-issued regulation on chemical production to improve air quality in Beijing and the surrounding areas.

Meanwhile, the benzene market is expected to see an uptick in new capacities next year. Downstream sectors will also see an increase in new capacities in 2022.

REGIONAL BENZENE EXPANSIONS

Company Location Capacity
(‘000 tonnes/year)
Start-up time
Shenghong Refining and Chemical Lianyungang, China 1,060 Q1 2022
Shandong Yulong PC Longkou, China 808 Q1 2022
PetroChina Guangdong Petrochemical Jieyang,

China

200 Q2 2022
Rizhao Lanbridge Port PC Rizhao, China 170 Q3 2022
HPCL/Mittal Energy Phulo Khari, India 79 Q1 2022
Long Son Long Son,

Vietnam

350 H2 2023
KPIC Al Zour, Kuwait 480 H2 2023
ADNOC Ruwais II,
United Arab Emirates
505 H2 2023
ExxonMobil Chemical Huizhou, China 300 Late 2024

In October 2021, the market bid farewell to Japan’s ENEOS’ Chita-based plant, which produces 216,000 tonnes/year of benzene. The decision was made in view of the structural decline in demand for petroleum products in Japan and in Asia as a whole.

REGIONAL BENZENE MAJOR DERIVATIVE EXPANSIONS

STYRENE MONOMER (SM)
Company Location Capacity

(‘000 tonnes/year)

Trial runs
Wanhua Chemical Yantai, China 650 End Dec 2021
Lihuayi Shandong, China 720 End Dec 2021
ZRCC Lyondell Chemicals Zhenhai, China 630 End Dec 2021
Dagu Chemical Tianjin, China 500 Q1 2022

Some SM and styrenic plants are also slated to start beyond Q1 2022.

Zhejiang Petroleum and Chemical (ZPC)’s phase II phenol plant is expected to kickstart the slew of capacity additions from end-2021. ZPC II’s commercial production is expected in early 2022.

As such, projections for benzene are more optimistic for China as compared with other regional markets.

According to ICIS Supply & Demand Database (SnDD), projected consumption in South Korea is revised down by 142,000 tonnes in 2022, a drop by about 3.5% year-on-year. The utilisation rate is expected to stay close to 90%.

For China, 2022’s projected consumption is revised upwards by 1.61m tonnes, up by nearly 8.7% year-on-year. The utilisation rate is expected to stay at 69%.

Projected consumption within southeast Asia is expected to be largely similar in 2022, as compared with 2021. The utilisation rate is expected to dip by about 3% to 74%, considering the regional turnarounds.

REGIONAL H1 2022 PLANNED MAINTENANCE*

Company Location Route Capacity

(kta)

Timing
Fujian Refining & Petrochemical Company Quanzhou,

China

Reformate 80 1 – 10 January
Sinochem Quanzhou,

China

TBC TBC 1 – 20 January
Sinopec Maoming Maoming,

China

Reformate 210 20 February -16 April
Sinopec Hainan Yangpu, China Disproportionation, reformate 200 23 February – 30 April
Sinopec Yangzi Nanjing, China TBC Around 160 24 March – 18 May
Nippon Steel Chem Oita, Japan Reformate, coal, pygas 205 Early February – early April

Almost two months

Petronas Kerteh,
Malaysia
Reformate, disproportionation 200 February – March

Up to 50 days

GS Caltex South Korea Disproportionation 420 Mid-September – October

Around 50 days

Tosoh Yokkaichi, Japan Pygas 154 Early March – H2 April

Around 50 days

ENEOS Kawasaki, Japan Pygas 111 Q1 2022
Sinopec Zhenhai China Reformate, disproportionation Around 220 30 March – 8 July
PTTGC Map Ta Phut, Thailand Reformate, pygas, disproportionation 475 May

30 days

Taiyo Kikuma,

Japan

Transalkylation C9+, reformate 300 May – June

Almost 2 months

Mitsui Osaka,

Japan

Cracker 130 June – July

Almost 40 days

S-Oil South Korea Reformate 110 June, 45 days
SKGC Inchon,

South Korea

Reformate 455 Mid-September, 45 days
Idemitsu Kosan Tokuyama

Japan

Pygas 274 September – October
IRPC Rayong,
Thailand
Pygas, reformate 115 October – November
FCFC Mailiao,

Taiwan

Reformate, pygas,  disproportionation 250+350 Q4, 1 month

Source: Market sources
*Subject to changes.

Focus article by Angeline Soh

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