BUSINESS
High Output, Inventories Bring Slump in Aromatics Prices Benzene price returns to level of a year ago as toluene and mixed xylenes prices also decline because of supply bulge Bruce F. Greek, C&EN Houston
Price surges for basic aromatic chemicals last winter have produced the usual results: a significant increase in output followed by a rise in inventories and a consequent slump in prices. During June, the contract price of benzene was about $1.15 per gal, down 20% from May's $1.45 per gal and only slightly higher than last June's $1.10 per gal. Similar declines in prices following substantial increases also have occurred for the other basic aromatics—toluene and mixed xylenes. Year-ago contract prices for benzene of $1.10 per gal held through the third quarter of 1988. Then export demand for some benzene de-
Benzene output hits record | high, toluene output lags i
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rivatives, such as styrene and polystyrene, rose. At the same time, operating problems developed in some production and purification units, causing an apparent shortage and forcing consumers to buy benzene from foreign sources at higher prices. Late in the winter, added impetus to benzene demand resulted from plans to reduce volatility limits for gasoline sold in various parts of the U.S. this summer. To reduce the volatility, less relatively highoctane value ?2-butane would be used in gasoline, with an expected replacement of catalytic reformate, the largest source of purified aromatics. Consumers of benzene and toluene [largest chemical use is to make benzene by hydrodealkylation (HDA)] as well as of o-xylene and p-xylene built inventories in anticipation of higher prices expected in the second quarter. At the same time, gasoline marketers built their inventories to supply the summer vacation driving demand. It became clear in May that inventories were excessive and that the possible problems of meeting demand for gasoline with lower volatility this summer would be fewer than had been expected. For example, at the end of the first quarter, U.S. inventories of benzene were 143 million gal, up 22%, or 26 million gal, from year-earlier inventories, according to the National Petroleum Refiners Association's petrochemical surveys. Production of benzene in the first quarter rose more rapidly than inventories on a volume basis (62 million gal), even though more slowly on a percentage basis, increasing 15% from firstquarter 1988 to 473 million gal, according to the NPRA survey. Growth in benzene production during the rest of 1989 probably will slow from the first-quarter lev-
Benzene prices return to j year-ago levels 1 Contract price, $ per gal I 1.80 I
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a Gulf Coast price for bulk sales. Source: C&EN estimates
el. Total 1989 production likely will reach 1.75 billion gal, up almost 9% from the 1.61 billion gal for 1988, according to preliminary figures from the International Trade Commission. Output of toluene and mixed xylenes likely will increase about 6% during 1989. As demand slows, projections for longer term growth in production are being scaled down from projections for this year's growth. For example, U.S. demand has been forecast to grow at an average rate of 3% annually between 1988 and 1995, says Mark Fissler of Chemical Market Associates Inc. (CMAI), a Houston-based consulting firm specializing in petrochemicals. Fissler directed the firm's just-completed 1989 World Benzene Analysis. By 1995, U.S. demand for benzene will reach 2.27 billion gal, part of which will be supplied by imports, which will exceed exports. Benzene demand growth worldwide will be faster than in the U.S., July 3, 1989 C&EN
11
Business
Output of xylene isomers shows divergent growth Billions of lb
0 I I I I l I _ J I I I iI 1978 79 80 81 82 83 84 85 86 87 88a 89b a Preliminary, b C&EN estimate. Source: International Trade Commission
according to the CMAI analysis. Global demand grew from 4.88 billion gal in 1983 to 6.35 billion gal in 1988 and is forecast to grow to 8.26 billion gal in 1995. The compounded annual growth between 1988 and 1995 will be 3.8%, says Fissler. The fastest growing use of benzene worldwide will be for making ethylbenzene for subsequent dehydrogenation to styrene. This use is expected to grow 4.9% per year between 1988 and 1995. The second fastest growing benzene market, for making cumene used in producing phenol and acetone, will grow 4.0% annually in that period. Use of benzene in making cyclohexane will grow 1.7% annually. All other uses, which include making chlorinated benzenes, nitrobenzene (for aniline, for example), maleic anhydride, and smaller-volume derivatives, will grow at a combined rate of 2.7% per year. The growth of the all-other category will be held down by a decline in the use of benzene in making maleic anhydride, as producers worldwide shift to technology that uses butane as a feedstock. Sources of benzene will about retain their relative proportions of the total, except for coal tar, which will not grow and therefore will lose more of its tiny share, according to the CMAI analysis. Benzene removed from catalytic reformate will grow 4.2% per year; from pyrolysis gasoline (a coproduct of ethylene manufacture) 4.1%; and from HDA 12
July 3, 1989 C&EN
and disproportionation of toluene (TDP)4.8%. Growth in benzene output from catalytic reformate will stem mostly from producers using streams not previously processed for aromatics production, Fissler says. But some growth will include production by companies drawn to aromatics by good profits in recent years. The analysis shows that an additional 5% of available benzene in the worldwide motor gasoline supply will be extracted to meet increased demand for chemical uses. As for other sources of benzene, expansion of world steam cracking capacity to make primary olefins will account for growth in pyrolysis gasoline as a source of benzene. HDA and TDP capacity will continue to operate on a swing basis as demand requires and will continue to set the basic price structure, the CMAI analysis shows. In the future, TDP units are expected to be favored over HDA units as a better investment for "on purpose" benzene production. Toluene and mixed xylenes (ortho, meta, and para isomers and ethyl benzene) also are derived only from petroleum or coal tar. Coal tar has become a negligible source of mixed xylenes in the U.S. and a very minor source of toluene. By far the major source of toluene is catalytic reformate; many ethylene plant operators do not recover the toluene from pyrolysis gasoline. A large volume of toluene of less than 98% purity is recovered from reformate and may be blended into gasoline as a high-octane component. To some extent, the value of toluene is determined by competition from methyl text -butyl ether (MTBE) as an octane enhancer for gasoline. Some of this lower purity toluene may be used in HDA and TDP units to make benzene, but higher purity material is preferred and used if a cost differential is not significant. More than half of the nearly 900 million gal of toluene produced last year for chemical uses was dealkylated or disproportionated to benzene. Strong demand for benzene pushed up its price, allowing operators of HDA units to run profitably. As a rough rule of thumb, the selling price of benzene must be a few cents more than the price of
toluene divided by 0.8 to make operation of an HDA unit profitable. HDA units are relatively easy to start up and shut down, so these units account for the swing production of benzene, depending on relative selling prices. The remainder of toluene produced for chemical uses w e n t to solvents, t o l u e n e diisocyanate for urethanes, and other smaller volume derivatives. The dominant source for mixed xylenes also is catalytic reformate. Additional quantities are recovered from pyrolysis gasoline and from coal tar light oils. Frequently, pyrolysis gasoline, after benzene is removed, may be shipped from operators of steam crackers to refineries and processed there to separate the xylenes and also the toluene. However, less than 10% of mixed xylenes production goes for nonfuel uses in the U.S. The mixed xylenes for nonfuel uses are processed to remove o-xylene and ^-xylene for use in making intermediates such as phthalic anhydride, dimethyl terephthalate (DMT), purified terephthalic acid (PTA), and sometimes the ethylbenzene for styrene. Only small quantities of m-xylene are used in making chemicals. In the first quarter of 1989, preliminary ITC data show that mixed xylene production was up a substantial 13% over last year's first quarter to more than 222 million gal. The output of mixed xylenes in the first quarter exceeded that of toluene, a rarity in recent years. The surge in mixed xylenes production apparently has been spurred by shifts in world demand. Exports of mixed xylenes, particularly to the Asian countries of the Pacific Rim, have been strong, as producers there seek them to recover o-xylene and p-xylene to make phthalic anhydride for plasticizers and DMT/PTA for polyester manufacture. In this area, all catalytic reforming capacity has been used to make gasoline components, resulting in a relatively high value for reformate. The high value stimulates imports of mixed xylenes from the U.S. Uncertainties of future production and export of apparel containing polyester fibers from the Far East to the U.S. could reduce both export demand and growth in U.S. output later in 1989. •
BP Chemicals boosts global acetic acid capacity Patricia L. Layman and Dermot A. O'Sullivan, C&EN London
Two weeks ago, BP Chemicals, a subsidiary of British Petroleum, added nearly 5% to world capacity for acetic acid with a new plant at its chemicals complex in Hull, northeast England. Featuring a combination of elegant chemistry and well-thoughtout chemical engineering, the plant (which BP calls an "acetyls" plant) consists of a combined acetic acid and acetic anhydride unit, a carbon monoxide unit, and off-site facilities. Supporting production facilities include an air separation unit that is one of the largest in the U.K. Another unit produces ammonia from by-product h y d r o g e n and nitrogen. Capacity of the plant is about 385 million lb per year, the equivalent of about 440 million lb per year of straight acetic acid. It adds to acetic acid capacity already present at Hull, and to the company's Texas supply, which it purchased in 1986 when Monsanto pulled out of the acetic acid business and BP bought its technology. BP also negotiated with Sterling Chemical, which bought Monsanto's acetic acid plant at Texas City, Tex., for full marketing rights. Marketing in the U.S. is now handled by American Acetyls, a BP Chemicals/Union Carbide joint venture that also deals in vinyl acetate and derivatives as well as acetic acid. Total capacity at the Hull plant will be about 1.32 billion lb per year at full production, and the Texas City marketing involves nearly 550 million lb, giving a combined total of 1.87 billion lb per year. The total now consolidates BP Chemicals' position as a "good number two," in the world, according to John Hooper, chief executive of the acetyls and solvents division. The top producer is Hoechst Celanese, whose combined operations at Frankfurt, West Germany, and Clear Lake and Pampa, Tex., probably provide a total capacity of about 1.98 billion lb per year. Together, the two companies supply about half the noncommunist countries 7 demand
for acetic acid, which BP Chemicals estimates at 7.7 billion lb. East bloc countries probably account for another 2.2 billion lb per year, although Hooper notes that there are no reliable statistics. Hoechst Celanese and BP Chemicals are really in a separate league from other producers. The third and fourth largest producers, RhonePoulenc of France and Quantum Chemical of the U.S., each have capacities of about 660 million lb per year. All are competing to supply a highly varied market for acetic acid and its derivatives. The major application is vinyl acetate, which takes about 36% of production, followed by cellulose acetate at 18%, esters at 13%, and terephthalic acid at 9%. Of the various segments, the largest single use, cigarette tow made from cellulose acetate, takes only 10% of total demand, closely followed by paints as an end use for vinyl acetate, at 9%. Other end uses include inks and adhesives, film, bottles, herbicides, pharmaceuticals, dyes, plastics, and textiles. Many of the smaller, specialty end uses have faster growth rates, but overall, Hooper says, growth is probably 2 to 3% per year. A high proportion of total worldwide capacity is used captively; for example, BP has a major vinyl acetate plant at its Baglan Bay complex in Wales. A market healthy and growing, and already a major presence in the business—that was the stage BP had reached in 1984 w h e n it began thinking about a new acetic acid plant. "We wanted an additional unit, partly to meet the growth, and also partly to have merchant quantities available," Hooper says. The questions were where, what, and how? The obvious site would seem to have been Hull, where BP's other acetic acid operations are. However, says John Routley, manager of the company's engineering and technical department, the area had a poor history of construction performance in the 1970s, when construction time estimates were typically doubled,
and BP needed to commission a plant quickly. It also had developed new technology in-house for acetic acid production. Acetic acid producers use three basic routes to acetic acid: acetylation of ethylene, oxidation of naphtha, and carbonylation of methanol. In terms of total cost, methanol carbonylation is the lowest. Naphtha oxidation involves particularly high capital costs, and ethylene feedstock has high variable costs. The share of total production held by the ethylene route has fallen from the highs of the 1970s, at about 2.64 billion lb, to about 2.2 billion lb per year. Naphtha oxidation has reached a stable level of about 1.32 billion lb per year. But the share accounted for by carbonylation has more than doubled in the past 10 years to nearly 4.4 billion lb. The technology, however, has always been for straight acetic acid production. The process that BP Chemicals' Hull Research Center developed achieves production of both acetic acid and anhydride in proportions that can vary according to market need.
Distillation column on BP Chemicals' new acetic acid/acetic anhydride plan t July 3, 1989 C&EN
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Business At the conceptual stage, the new complex started out as strictly another acetic acid project, recalls Routley. "We initially thought of putting up a replica of our existing 440 million lb unit that we built at the Hull site some 10 years ago, based on Monsanto's technology. But since a significant percentage of output would go to make acetic anhydride, it didn't seem right to us as technologists to first make the acid, and then convert it to anhydride by the classic ketene route. By taking out additional reaction steps, there has to be a significant cost improvement. "Our R&D people had been looking at a range of carbonylation technologies. They saw the possibility of coproducing both acetic acid and the anhydride through modification of the Monsanto process." In 1985, BP decided to go with the new, in-house technology, and in 1986 was able to acquire the Monsanto technology. "In so doing, we did stick our necks out," Routley admits. "We took the process straight from bench-scale to full plant size, which involved a multimillion [pound] investment. We were under a lot of pressure from our marketing people to get the plant up and runn i n g . There w a s n ' t time to go
through a conventional pilot-plant stage." In fact, Routley points out, the company did build pilot plants as the construction proceeded, to confirm the decisions it was making. Looking at the complex as a whole, the acetyls plant is at the core. The crucial reaction involves interaction of carbon monoxide with methanol and methyl acetate in the presence of a rhodium catalyst to yield acetic acid and acetic anhydride. Being a "swing" reaction, the ratio of acid to anhydride is controlled by adjusting the reaction conditions. In the new Hull plant, designed by John Brown pic, output can vary from 40 to 60% of the total for acetic acid with output for acetic anhydride varying conversely. The two are separated by fractionation. "It gives us the flexibility of producing the acid or anhydride within those ranges," explains acetyls development manager Keith Mackman, who coordinated the project. "The total amount of acetyls is the same, but one can vary the proportions." Some of the acid goes to an esterification unit where it interacts with methanol; the methyl acetate formed is fed back to the carbonylation reactor. Additionally, the plant has a rhodium recovery sys-
BP process makes acetic acid, acetic anhydride Hydrogen
Ammonia
Ammonia unit
Distillation column Nitrogen Air separation unit
Hydrogen
Oxygen
Partial oxidation reformer
Carbon monoxide
Methyl acetate
Acetic anhydride Acetic acid
Air
Natural gas (methane)
Methanol Methanol
CH3OH + CO
— CH3COOH
CH3COOCH3 + CO Methyl acetate
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July 3, 1989 C&EN
^(CH 3 CO) 2 0 Acetic anhydride
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