I/EC M A R K E T O F T H E
R E P O R T M O N T H
Maleic Anhydride Fast-increasing capacity for maleic anhydride and sidekick fumaric acid will exceed demand until after 1965
MALEIC ANHYDRIDE IS PRODUCED BY
Allied Chemical
American Cyanamid
Monsanto Chemical
Reichhold Chemical
FUMARIC ACID IS PRODUCED BY
Allied Chemical
Bzura Chemical
Monsanto Chemical
Pittsburgh Coke & Chemical
Utah Resins
Calculated almost any way, the present round of expansion of maleic anhydride capacity shows that this segment of the chemical industry held great prospects to market researchers a couple years ago. Prospects now depend on your view of how fast demand for maleic will expand. Expansions to be completed this year come close to equaling the industry capacity as of January 1 of this year. New plants and additions to present plants are expected to increase annual maleic anhydride capacity by 114 million pounds to a total of 240 million pounds. Running at about a fifth of maleic anhydride production, side-kick fumaric acid will increase to over 30 million pounds per year. Probably some market research managers were not far wrong to push for new capacity a few years ago. But too many managers did push. Result: overcapacity that may last beyond 1965. From 1956 on, demand for polyester resins using maleic for boats began, kicking off a recent temporary shortage. Used in a host of other consumer products besides boats, demand for polyesters from maleic anhydride has continued to increase. In spite of these confident views, prices are expected to be under pressure. Early in 1960, maleic anhydride's posted price tumbled to 22.5 cents a pound (tanks). However, this price, steady through the thick and thin of 1960's plant expansion announcements, may continue to hold in spite of apparent over capacity. Sales managers have not forgotten the lesson of phthalic anhydride in that a lower price did little to increase consumption beyond expected growth. Another unknown in maleic's price is benzene's price after the round of benzene expansions now underway comes on stream. All uses of maleic anhydride in 1961 may exceed 100 million pounds, a figure considered optimistic by some people. Of this total, polyester resins will take almost two thirds, or 67 million pounds. Next in volume, and growing rather slowly, are alkyd coating resins, estimated to take about 15 million pounds this year. Other uses include agricultural chemicals (mostly to make malathion), paper sizes, plasticizers, and drying oils. Fumaric acid goes into about the same end-use pattern as does maleic anhydride. Its big selling points are that it makes polyester resins with better heat resistance and greater hardness than does maleic anhydride. Fumaric now costs less than a cent per pound more than maleic. But fumaric containsbound water which means more is needed to do the same job. Outlook for demand of products from maleic anhydride is rosy, by normal standards. But not rosy enough when considering all the recently announced expansions. Fast-rising polyesters will continue to expand at a rapid rate, but with a declining percentage rate. In 1959 about 40% of all maleic anhydride ended up in polyesters. By 1965, polyesters may take 70% of all maleic anhydride. Or on a weight basis, predictions are that 500 million pounds of polyesters will consume around 125 million pounds of maleic anhydride in 1965. Other outlets for maleic anhydride have varying degrees of expansion rates. One, alkyd coating resins, depends heavily on technology, particularly if a water-based alkyd paint is developed. Such a development appears likely because water-based paints continued to displace those that use organic solvents. VOL. 53, NO. 4 • April 1961
29 A
MARKET
I/EC MALEIC ANHYDRIDE IS USED IN
Polyester Resins
Alkyd Coating Resins
Agricultural Chemicals
REPORT
OF
THE
MONTH
Malathion, an insecticide used heavily on cotton, corn, and other price supported crops, continues to have good growth prospects—because of government controls on planting, farmers endeavor to get higher yields per acre. Malathion's demand for maleic anhydride has increased around 15% per year lately. Several of the uses of maleic anhydride that now fall in the miscellaneous classification are expected to emerge as sizable individual uses by people optimistic about maleic's future. Possible uses for such a low cost, highly functional material indeed appear broad. These include uses as esters for internal plasticizers of poly (vinyl chloride), as a modifier for polyisoprene, as a component of various new resins just becoming commercial, and as succinate derivatives for pigments. The usual factor, inventory of a month's demand, will also contribute to increased production of maleic. If demand increases 60% by 1965, inventory will be up nearly as much, or some 6 million pounds. Overshadowed by the rash of expansions of maleic anhydride capacity, but by no means overlooked, is Petro-Tex Chemical's new process for making maleic anhydride from butylenes. The company has a new plant using the process coming on stream this October. Design capacity is 30 million pounds per year. The plant will use straight forward vapor-phase catalytic oxidation of butylenes to maleic anhydride, and thus avoid the one third loss of feedstocks which results when starting with benzene in a conventional plant. Petro-Tex claims pilot plant tests of its process showed yields well above those starting with benzene. But neither it nor Scientific Design, who engineered the new plant, is saying what kind of cost savings can be expected. With mixed butylenes at about 4.5 cents per pound in large quantities and benzene now at about 6 cents per pound, and without the one third loss, differences in raw material costs are obvious. Tied in with the start-up of the maleic anhydride unit, Petro-Tex will start up a tetrahydrophthalic anhydride unit soon afterward. A large butadiene producer, Petro-Tex will make tetrahydrophthalic anhydride by a Diels-Alder reaction of butadiene and maleic anhydride, thus having a captive outlet of some size for both its maleic and its butadiene. The surplus in capacity for maleic anhydride that will be around until after 1965 doesn't seem to worry producers. Overcapacity for other chemicals, around for varying periods since 1950, has caused no important producer to quit making any chemical. But it would be nice if some outlet appears on the horizon this year to soak up the excess capacity. Equally as good would be for projected consumption figures to prove radically low. Neither of these prospects seem completely likely, but a little of both is hoped for and may make the future consumption picture brighter than it appears.
Maleic Anhydride Producers
Company
Location
Fomaric A d d
P r e s e n t Producers Allied Chemical (National Aniline Div.) American Cyanamid Monsanto Chemical Reichhold Chemical
, c %*' a M i l l i o n s ™ Pounds Company
Location
30 A
per Year
Existing Facilities Moundsville, W. Va. Buffalo, N . Y. Bridgeville, P a . St. Louis, M o . Elizabeth, N . J. Total
20 20 20 60 6 126
Applied Chemical (National Aniline Div.) Bzura Chemical M o n s a n t o Chemical Pittsburgh Coke & Chemical Utah R e s i n s
Additions and N e w Plants D u e on Stream before the E n d of 1961 H e y d e n Newport Pittsburgh Chemical Petro-Tex Chemical Reichhold Chemical Standard Oil (Cal.)
Producers
Capacity, Millions of P o u n d s per Year
Fords, N . J. Neville Island, Pa. H o u s t o n , Tex. Elizabeth, N . J. Richmond, Cal. Total Capacity at end of 1961
INDUSTRIAL AND ENGINEERING CHEMISTRY
24 20 30 20 20 114
D u e
5 5 4 9 3 2.5 „„ ze. 5
on
Stream This Year Fords, N. J. T « . . I . . r „ j «* i o « i Total at End of 1961 ° Capacity is a function of maleic anhydride-containing ma y oe wried as needs dictate. H e y d e n Newport
240
Moundsville, W. Va. Buffalo N . Y. Keyport, N . J. St. Louis, M o . Neville Island, Pa. Salt Lake City, Utah _ . , 1 otal
4 « « 32.5 streams and
