Price declines trouble benzene and toluene
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FOR CHEMICAL PROCESS^ INDUSTRIES IN
GEORGIA
An upturn in the price of benzene and toluene, which started to decline last September, is not in the foreseeable future as most aromatics producers see it. A firming close to the currently accepted posted price of 23 cents per gallon for benzene is only hoped for by late this year. Further, all but the most fortunate companies this year will find net income on benzene and toluene averaging at least 10% below 1967. And prices next year will be still lower than during early 1967. This grim future doesn't hold for all aromatics. For example, o-xylene and p-xylene prices and demand are expected to hold their own because of expanding uses in phthalic anhydride and dimethyl terephthalate and in polymers made from these materials. The decline in prices for benzene and toluene is attributed to rapid expansions in capacity at a time of declining exports of benzene derivatives and declining domestic consumption. Uses of benzene affect toluene directly. Manufacture of benzene is the largest chemical use of toluene. The lessened demand could cause some units which dealkylate toluene to be shut down.
Dealkylation economics.
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Nationwide Network 20 C&EN MARCH 11, 1968
A rough
rule in dealkylation economics is that the spread between the cost of toluene to be dealkylated and the price received for benzene must be 8 cents per gallon to be barely profitable. This presumes a suitable payout on the hardware. If a longer payout time is accepted, then the spread can be less. So far, a smaller spread seems the trend of the aromatics industry; few, if any, dealkylation units have been shut down. Industry consensus is that, at a 4-cent spread, dealkylators of toluene are getting just raw materials cost. No other factors seem likely to affect significantly the toluene situation over the next three years, except for a growth in demand for aviation gasoline. Hydrocracking, as a process to supply needed components for the gasoline pool, particularly those needed for octane values, will not change toluene's value much. Beyond the next three years the picture is less clear. Drastic reduction or elimination of lead alkyls in motor gasoline could cause toluene (and other aromatics ) to be used more in gasoline to replace the octane values imparted by lead alkyls. Then, prices for toluene and the others should move up. Benzene prospects. Benzene, on the other hand, has a number of factors to influence its near-term future, not the least of which is added capacity. During 1967, U.S. capacity in-
creased roughly 30% to about 1.3 billion gallons per year. And other additions are coming on stream this quarter. Total production of benzene in 1967 probably will be very close to 1 billion gallons (preliminary totals are about 0.95 billion gallons). This will be just a bit greater than in 1966. The very large difference between gain in capacity and gain in production shows that the price problem will continue for some time. The major impact of lower production of benzene derivatives began at midyear and seemed to last for three or four months, but was enough to affect annual production rates. According to preliminary figures from the U.S. Tariff Commission, synthetic phenol production was off more than 8% from 1966. Cyclohexane output declined 12% to 1.67 billion pounds. On the other hand, production of styrene gained, albeit slightly, to 3.3 billion pounds, up from 3.2 billion pounds in 1966. But not all styrene came from ethylbenzene made by alkylating benzene with ethylene; about one seventh was made from ethylbenzene fractionated from mixed xylenes streams. Other smaller chemical uses of benzene showed gains and losses over 1966. Aniline fell about 7%. Monochlorobenzene dropped 15%. But maleic anhydride gained nearly 4%. Prices of many benzene derivatives also dropped during 1967. In some cases, posted prices didn't change, but the actual selling price did. For cyclohexane, the price dropped to 1 cent per gallon below the current prioe of benzene, ending a long-standing rule that cyclohexane is priced 1 cent above benzene. Styrene and other benzene derivatives should generally show larger outputs during 1968. But even with expanding demand, prices likely will not gain much because of the large excess capacity available. Styrene, with a small gain in production in 1967 and possibly a good gain in 1968, could be a candidate for higher prices. But soft benzene prices and some new capacity to ease a tightening supply combine to eliminate the chance of a price increase. In view of the current and potential softness in prices for benzene and limits on available precursors, not much new capacity can be expected for some time. Unused capacity, if any, will be toluene dealkylation capacity. Those in the business doubt much of a shutdown if benzene prices hold at or near 23 cents per gallon. If benzene should drop even further, then there might be a rash of dealkylation unit shutdewns, especially if tanks are full and gasoline is the only place to put the benzene.
