By OGJ editors
HOUSTON, May 7 -- The year 2001 was one of the worst years for benzene demand, according to a recently completed Chemical Market Associates Inc. study. However, conditions are in place to reverse that trend and firm up demand within the next 4 years
Cumene and phenol, also studied by CMAI, continue to enjoy strong demand growth, while cyclohexane languishes.
Inventory destocking and the worldwide economic slowdown resulted in a 3% global contraction in demand for benzene in 2001—the first such contraction on a global basis since 1982, CMAI said. North America was hit the hardest, with a 15% demand reduction in the US.
While world trade has always been important for benzene, trade patterns are changing, CMAI said. In the past few years, large regional surpluses from Asia and elsewhere were pushed into the US market, where net benzene imports approached 1 million tonnes/year. Prior to 2001, benzene demand had been closer to 5%/year, CMAI said, but the 2001 decline in demand pulled the average down significantly so that demand growth averaged only 3.5%/year during 1996-2001.
However, benzene reductions in gasoline are essentially complete, CMAI said. Opportunities for new select toluene disproportionate investment are limited, and growth in benzene coproduct from steam crackers is slow due to a high level of new ethane-based capacity. Working from the lower 2001 base, CMAI forecasts demand to grow 4.6%/year through 2006. During that period, global balances will firm and restore some lost margin to benzene production, it said.
CMAI said that cumene has enjoyed strong demand growth since the 1993 recession when it added 3.3 million tonnes to a 5.4 million tonne/year base.
Production of cumene has grown from 7-8 million tonnes/year to 9-10 million tonnes/year during 1996-2001, and that amount should be eclipsed during 2002-06, CMAI said.
Phenol set the pace for cumene's strong growth during1996-2001. The world continues to move in the direction of integrated cumene-phenol units, CMAI said, either through partnerships and alliances or through new integrated units. All phenol capacity that has come on stream in the past few years and that which is scheduled until 2006 will be based on growth in demand for cumene, CMAI said.
The demand growth pattern for cyclohexane seems to be coming in surges rather than steady year-on-year growth as seen with cumene and styrene, CMAI said. Cyclohexane suffered 3 consecutive years of declining demand to start the1990s, then experienced two cycles of growth through 2000, with down years interrupting the overall trend in 1998 and 2001.
Although demand for most major chemicals is forecast to grow in 2002 after a dismal 2001, cyclohexane will continue to languish, with real growth not resuming before 2003. The next major issue for cyclohexane is where to find low-cost hydrogen, as Europe and the US lower sulfur limits in gasoline and diesel and increase demand for local hydrogen.