SRI Consulting, Menlo Park, Calif., says the supply and demand of ethylene oxide are virtually parallel in North America. Both grew at a 5.2 percent annual rate between 1992 and 1997 and should grow at a 1.9 percent rate through 2002.
Strong growth for ethylene oxide derivatives is driving demand for purified EO. Ethylene glycol is EO's largest market in terms of volume, but purified ethylene oxide is used in higher-value derivatives.
The consumption for non-glycol derivatives has been healthy for the past two years. Demand for ethanolamines and ethoxylates is particularly promising and should remain so throughout 1998. SRI expects annual North American demand for ethanolamines and ethoxylates to rise 3.2 percent and 2.5 percent, respectively, through 2002.
US producers' optimism in the ethylene oxide market is shared by their European counterparts. Demand has been strong on that continent, and Europe's ethylene oxide and non-glycol derivative markets should remain firm for the rest of 1998.
"Due to the high expense involved with ethylene oxide production and handling, many US companies have put their investments in value-added derivatives over the past decade instead of marketing purified ethylene oxide," an analyst says. "As a result, there are currently four major US companies that sell purified ethylene oxide to outside buyers, which is a 40 percent drop from the early 1980s."
In Europe, about a dozen major companies produce and sell purified ethylene oxide for outside buyers.
The difference between the two markets is also reflected in their dynamics. "In the US, pricing trends for ethylene oxide derivatives follow purified ethylene oxide values," an analyst notes. "That is not the case in Europe."
Inspec Group PLC is selling its plant in Antwerp, Belgium, to Ineos PLC, a new company whose management includes members from Inspec. The sale will allow Inspec to focus on specialty chemicals without having to manage a commodity chemicals business.
Ineos will fund the buyout through the sale of long-term, high-yield bonds, allowing it to navigate market cycles.
Inspec expects to complete the sale by the end of the month, once its shareholders approve it and Ineos finishes raising funds.
The plant, which Inspec bought three years ago, has 405 acres, employs 420 people and produces around 200,000 tons of ethylene oxide per year. Of that, 55,000 tons is marketed, and the balance is used internally to manufacture ethylene glycol.
About two weeks ago, an accident in an out-of-service equipment area at Union Carbide Corporation's ethylene oxide unit in Taft, La., killed a worker and injured another. The incident caused no damage to the plant or its operations, though the injured contract worker was hospitalized and released.
Last week, Union Carbide Corporation and Petronas, the national oil company of Malaysia, finalized a 50-50 joint venture to build and operate a petrochemicals complex, which will include ethylene oxide production for glycol and non-glycol derivatives (CMR, 4/13/98, pg. 1).
Ethylene oxide commands a list price of roughly 52 cents per pound, though large-volume buyers receive discounts.
BTX--The benzene market is stable and analysts expect April contract prices to settle between 76c. and 77c. per gallon. The market should remain level on into next month as long as domestic inventories remain high.
Gasoline imports may increase, however, if gas prices strengthen.
Toluene should rise this month, and contract prices are expected to settle between 63.5c. and 65c. per gallon. Prices should strengthen further in May, thanks to a seasonal increase in gasoline demand.
People in the xylene industry also expect improvements when the gasoline season begins. April contracts are expected to settle between 61c. and 63c. per gallon. Exports to the Far East have dwindled, and healthier exports would strengthen the market.
NGL--Chevron Corporation and Sasol Ltd. are forming a joint venture to open a natural gas liquids plant in Nigeria that will have a projected capacity of 20,000 barrels per day of diesel and naptha products.
The venture will involve technologies from Chevron, Sasol and Haldor Topsoe A/AS of Denmark.
Richard Matzke, president of Chevron Overseas Petroleum Inc. and a director of Chevron, says, "This partnership will provide the framework and guidelines for a solid merger of two technologies to commercialize gas by producing cleaner burning fuels--a key step toward major environmental enhancements through reduced emissions."
PROPYLENE GLYCOL--Arco Che-mical Company says SISU Diesel Inc. has approved the use of propylene glycol-based coolants in all of its engines, provided the coolants conform to the requirements and recommendations of ASTM 5216, BS 6580-92 and SISU Diesel.
"This is an important development for propylene glycol coolants, which are now widely used in Europe and the US," says Roger Dingly of Arco Chemical Europe Inc. "SISU's approval also offers further reassurance to vehicle operators that propylene glycol coolants are high performance alternatives to traditional products."