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June 07, 2005 12:00 AM

Propylene, benzene demand set to grow

Utech Staff
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    By David Reed, UT Editor

    London-Demand for benzene and propylene-key base materials for the polyurethanes sector-is set to continue growing through to 2020, according to the World Petrochemical Feedstocks Analysis study which has just been released.

    This joint study, by Purvin & Gertz and Chemical Market Associates, Inc. (CMAI), combines the latter's long-term view of demand growth for light olefins and aromatics, with Purvin & Gertz's view of the feedstocks supply necessary to support this growth.

    The study presents data to 2020, addressing issues ranging from factors limiting the growth of olefins and aromatics demand to shifting feedstock availability.

    The basic conclusions of the report are:

    * World demand for ethylene exceeded 100 million tonnes in 2004 and will grow to 177 million tonnes by 2020;

    * World propylene demand reached over 64 million tonnes in 2004, and could reach 116 million tonnes by 2020;

    * In particular, the report comments, demand for propylene is forecast to continue outpacing that for ethylene in the future; and

    * Demand for benzene is forecast to grow at an average annual rate of 2.8 percent per year through 2020, reaching nearly 57 million tonnes by 2020.

    The study also examined the situation with respect to mixed xylene demand.

    The strong growth in petrochemical demand over the 1990-97 time period placed considerable pressure on feedstock supplies and prices, the researchers commented. But, from 1998 through 2004, demand growth stalled at times, in response to various economic and geopolitical events around the world including the Asian Financial Crisis, SARS (severe acute respiratory syndrome), rising energy prices, conflict in the Middle East, and a global economic slowdown.

    However, demand rebounded in 2004 and world demand for petrochemicals is forecast to grow at an annual rate of about 2.5% through to 2020.

    Based on the forecast for light olefins and aromatics, some of the major conclusions relating to feedstocks that are presented in this analysis include:

    * About 55% of the ethylene in the world is produced from naphtha and, even though world demand for naphtha for petrochemical manufacture will grow at a rate of about 2.5% per year over the forecast period, its market share will slip to 45% due to the growth of ethane-based ethylene facilities in the Middle East;

    * The combined growth in olefins and aromatics production will require rapidly increasing naphtha supply. Demand growth will occur in all regions, but Asia/Pacific is expected to be the fastest growing area.

    * The rapid increase in condensate production in the Middle East will result in increasing supplies of naphtha as well. Some of the condensate will be processed in the Middle East, increasing naphtha exports.

    The balance will be processed in Asia to produce petrochemical feedstocks.

    A brochure and further information is available from: Glenda Burres, Purvin & Gertz, Inc., 600 Travis, Suite 2150, Houston, TX 77002, USA. Tel: +1 713 236-0318; Fax: +1 713 331-4000; Email: [email protected]; orErika Soechting, CMAI, 11757 Katy Freeway, Suite 750, Houston, Texas 77079, USA. Tel: +1 281 531-4660; Fax: +1 281 531-9966; EMail: [email protected]"

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