HOUSTON – According to a new IHS Chemical global market study, global demand for benzene, an aromatic hydrocarbon and one of the primary chemical building blocks for the petrochemical industry, increased to 43.7 million metric tons in 2013, an increase of 2.8 percent above demand for benzene in 2012.
By comparison, the world gross domestic product (WGDP) for the period increased by 2.5 percent, indicating that demand for benzene, at 1.12 times WDGP, was a welcome showing for the product, which is often considered an economic bell-weather due to its applications across industries, particularly after benzene’s dismal demand growth performance in 2011 and 2012.
During the next five years, says the IHS Chemical 2014 World Analysis - Benzene, global benzene demand is forecast to grow at just under 3 percent a year, reaching 50 million metric tons by 2018.
“While the news for benzene demand was good from a global perspective, demand strength for benzene was not spread evenly across the globe and the high growth regions of Asia carried the other regions to achieve the positive showing,” said Chris McCloskey, director of aromatics at IHS Chemical and one of the principal authors of the report. “In fact, while the world as a whole and the high growth regions of Asia and the Middle East have recovered from the 2008 global financial crisis, other regions are still in the process of making structural changes and have not yet recovered to pre-crisis demand levels,” according to the study from IHS, the leading global source of information and analysis.
Benzene consumers in several regions benefited from the strong recovery in Asia, primarily those in regions that are structurally short on benzene but also have an existing benzene derivative capacity base and an advantaged energy cost position. These regions imported benzene from Asia and exported benzene derivatives.
The report was produced by IHS, the leading global source of information and analysis, and covers historical developments and future projections for supply, demand, capacity and trade in the global benzene markets for 2008 to 2023. This analysis complements other related IHS Chemical 2014 World Analyses reports covering styrene, toluene/mixed xylenes, cumene, and phenol/acetone, as well as other benzene derivatives in the polyester and nylon chains.
“Benzene is a an important building block chemical for the petrochemical industry, its derivatives are used broadly in the construction, automotive, apparel, appliance, computer, electronics, durable and non-durable goods, packaging and other industries to make our lives easier, more productive and more comfortable,” said McCloskey. ”As a result, its growth rate is a reflection of the health of the general economy.”
Originally produced as a by-product of coke production for the steel industry, today benzene is mainly produced as a by-product of refinery and steam cracker operations. Since benzene is primarily produced as a by-product in the production of gasoline, ethylene and paraxylene, its supply is driven by demand for these products rather than by demand for benzene. It is used primarily for the production of styrene, cumene, phenol, cyclohexane, nitrobenzene and other industrial chemicals.
In recent years, benzene capacity has been added mainly in Asia and the Middle East. This trend is expected to continue in the coming years as these regions are primarily where naphtha crackers and refineries are being built, although some light-feed crackers are being planned in the U.S. to leverage advantaged ethane and natural gas from increased production of shale oil and shale gas.
The IHS report noted that increased production and consumption of shale oil and shale gas has resulted in ethylene producers shifting their feed stock slates from naphtha to ethane during the past several years. This shift in feed slates has, in turn, driven the decline in the benzene production rate in North America.
Said McCloskey, “As developing countries in Asia continue to make swift progress in increasing living standards for their sizable populations, market development, construction and demand growth for benzene and its numerous derivatives will continue at a strong pace. The more mature markets of North America and West Europe will benefit from Asian growth by using their existing capacity base to process excess benzene from Asia and South America into benzene derivatives, and in the case of North America, leveraging its advantaged energy cost position. The Middle East benefits from Asian growth by being a low-cost provider of raw materials, including naphtha for cracking and reforming, and as an exporter of benzene and derivatives to Atlantic and Pacific Basins.”
According to the report, production of ethylbenzene/styrene, cumene/phenol, cyclohexane and nitrobenzene will continue to consume more than 90 percent of the benzene produced in the coming years, and will have a combined annual growth rate of 3 percent during the study period.
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