Benzene demand to continue strong growth

Nov. 23, 1998
Benzene Supply Demand Forecast [91,904 bytes] Benzene demand is expected to continue its strong growth during 1998-2003, averaging 3.9%/year and reaching 35.1 million metric tons in 2003 vs. 27.9 million tons in 1997. So says DeWitt & Co. Inc., Houston, citing an impressive growth spurt in demand for benzene and its derivatives of 6.2% in 1997 vs. 1.6% in 1996. The strong showing in 1997 was a result of continuing growth in Asia and Western Europe, says DeWitt. Asian demand jumped 15% to 9.35
Benzene demand is expected to continue its strong growth during 1998-2003, averaging 3.9%/year and reaching 35.1 million metric tons in 2003 vs. 27.9 million tons in 1997.

So says DeWitt & Co. Inc., Houston, citing an impressive growth spurt in demand for benzene and its derivatives of 6.2% in 1997 vs. 1.6% in 1996.

The strong showing in 1997 was a result of continuing growth in Asia and Western Europe, says DeWitt. Asian demand jumped 15% to 9.35 million tons, with essentially all of the increase coming from ethylbenzene/styrene production.

"From 1996 to 1997," said DeWitt, "annualized styrene capacity in Asia increased by over 1.7 million tons. Although this capacity operated at only around 85%, the additional production was enough to replace most of its import needs from the U.S., whileellipseSouth Korea emerged as an exporter of styrene to the West."

Western Europe's demand was up 5% to nearly 7 million tons. A smaller contributor to last year's impressive demand growth was the Americas, which registered a 1% increase to 9.6 million tons.

Demand outlook

Benzene demand is expected to grow by a total of 7.2 million tons/year during 1998-2003, but capacity additions for benzene and most of its derivatives will exceed demand growth (see graph, this page). This will cause operating rates to fall over the period.

Benzene capacity utilization, expressed as a percentage, will be in the low to mid-70s, predicts DeWitt.

DeWitt also tracks consumption capacity, which is based on the nameplate capacity of downstream derivative plants. Consumption capacity utilization will be in the upper 70s, says the firm, primarily because global styrene capacity utilization will be closer to 92%.

While styrene has gained market share in the past, it is expected to account for about 55% of total benzene consumption during the forecast period.

DeWitt also analyzed regional contributions to global growth in styrene demand.

"Although the economies of Asia are now severely depressed, this region will continue in the forefront, with annualized growth over the period at 4.8%. However, this compares to the annualized rate of 9.2% from the prior 6 years through 1997.

"Growth in Western Europe will be the second largest of the major regions, forecast at 2.3% over the period. Growth in U.S. and total North America is forecast at only 2.1% and 1.9%, respectively.

"Growth rates will be higher in the Middle East, and maybe even South America and Eastern Europe," said DeWitt, "but they are all coming from a small starting base."

Production growth

Benzene production will keep pace with demand for the forecast period, says DeWitt.

Extraction of benzene from pyrolysis gasoline-a byproduct of ethylene production-will hold its share of total production at about 40%. Extraction from refinery catalytic reformers will increase its share, predicts DeWitt, from today's level of about 31% to 34% by 2003.

"Much of this (will be) driven by the need for more xylenes for paraxylene (production). The latter is also the key driver for the newer disproportionation technologies that will cause the associated benzene production to increase from about 2.7 million tons in 1997 to 4.7 million tons by 2003. This will take the share from these sources from 9.3% to 13.4% by 2003," said DeWitt.

"The added share gain by the reformer and disproportionation sources comes almost completely at the expense of THDA (toluene hydrodealkylation), although coal will also lose a minor share. Over the period, we forecast production from THDA to decline by over 25% to around 3 million tons."

Changing gasoline specifications will also have an effect on benzene production, as excess benzene will have to be removed from the gasoline pool.

"Although Western Europe will be increasing its producing base somewhat in response to the new legislation on gasoline calling for a limit of 1% benzene content by 2000, the region will still be structurally short of producingellipsecapacity. We forecast this shortfall will be primarily met by exportsellipse(from) the Middle East.

"WhileellipseSaudi Arabia is rapidly expanding its benzene producing base, it is also expanding its consuming base such that the nation itself will be mostly in balance during the forecast period. However, the region as a whole will remain the most, or one of the most, significant exporting regions, as availability from Iran, Turkey, and Israel (increases)."

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