OUTLOOK ’23: Asia benzene market eyes end-use recovery in 2023

SINGAPORE (ICIS)–Asia benzene players are hopeful for a demand recovery from end-use sectors next year in the aftermath of the pandemic and the economic downturn this year.

During the course of 2022, the Asian benzene market and its derivatives, particularly styrene monomer (SM) suffered margin erosion.

However, outlook for the market has improved after key market China on 7 December announced the lifting of its most stringent COVID-19 policies, which has boosted travel within and beyond the country.

“The general sentiment has improved. We are expecting to see higher demand for gasoline, in line with the easing of travel restrictions, which also bring more consumption for end-products,” said a China-based trader.

One of benzene’s feedstock, toluene, and derivative, cumene, could be used for gasoline blending.

Toluene being directed to gasoline blending instead of producing benzene, leads to a cutback in benzene production; a rise of cumene demand could bolster benzene consumption; both factors help in strengthening benzene’s performance. 

CONSUMPTION AND DERIVATIVE ADDITIONS
According to the ICIS Supply and Demand Databased (SnDD), benzene consumption in Asia and the Middle East is expected to rise by around 2% to more than 3.7m tonnes in 2023.

About 50% of benzene goes to ethylbenzene which produces SM; 20% to cumene which in turn produces phenol and acetone; and 15% to cyclohexanone which manufactures caprolactam.

An example of the end-use consumption is that 20% of SM goes into acrylonitrile butadiene styrene (ABS), from which 80% is used to manufacture household appliances and 10% to automobiles.

Some 1.2m tonnes of annual nameplate capacity of SM could be added in Asia across 2023; for phenol, the annual nameplate capacity additions could be around 1.6m tonnes, and around 2.4m tonnes for caprolactam.

 STYRENE MONOMER (SM)

Capacity additions

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
Zibo Junchen	Zibo, China	500	Feb-Mar 2023
Sinopec Luoyang Co.	Luoyang, China	120	Operationally ready, TBC mid 2023
Shandong Chambroad Petrochemicals	Binzhou, China	600	H2 2023 / Ealy 2024
Shandong Yulong PC	Longkou, China	1150	H1 2024
Zhejiang Petroleum & Chemical	Zhoushan, China	240+9	Full capacity by 2024

Closures

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
Abel Chemical	Taixing, China	250	2023

PHENOL

Capacity additions

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
Guangxi Huayi	Guangxi, China	175	Q1 2023
Qingdao Haiwan	Qingdao, China	200	Q2 2023
Huizhou Zhongxin Chemical	Huizhou, China	280	Q2 2023
Hengli Petrochemical	Changxing, China	420	Q1 2024
Lotte-GS Chemical	Yeosu, South Korea	350	Q2 2023
Heilongjiang New Ind. Inv.	Daqing, China	220	Q4 2023

CAPROLACTAM

Capacity additions

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
Sinopec Baling PC	Hunan, China	600	Q1 2023
OTOG Banner Jianyuan Coking	OTOG Banner, China	300	Q3 2023
Fujian Eversun	Fujian, China	300	Q3 2023
Fujian Shengyuan New Materials	Fujian, China	200	Q3 2023
Hubei Sanning	Hubei, China	400	Q4 2023
Guangxi Hengyi New Materials	Qinzhou, China	600	End 2023

Closures

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
Sumitomo Chemical	Ehime, Japan	85	2023
Ube Industries	Ube, Japan	90	Q2 2024

 BENZENE UTILISATION AND ADDITIONS

Prior to the pandemic, the utilisation rate in Asia and the Middle East was at 75% in 2019. The rate dropped to 69% in 2020.

By 2022, utilisation had improved to 72% , though the rate could be mitigated in 2023 to factor in stronger margin protection against the surging energy cost.

Additions End-2022

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
Shenghong Refining & Chemical	Lianyungang, China	1,060	On-spec production end- Nov 2022
Dongying Weilian	Dongying, Shandong	275	End-Nov 2022
Petrochina Guangdong	Guangdong, China	200	End 2022
PetroChina Jinzhou	Jinzhou, China	120	End 2022/Q1 2023
Petrochina Jinxi	Huludao, China	120	End 2022/Q1 2023

Additions 2023-2025

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
Sinopec Hainan	Yangpu, China	340	Q1 2023
HPCL/Mittal Energy	Phulo Khari, India	79	Q1 2023
Long Son Petrochemical	Long Son, Vietnam	350	Q1 2023
Jinao (Hubei) Science & Technology Chemical industry	Hubei, China	160	Q2 2023
Shandong Chambroad Petrochemicals	Binzhou, China	91	Jul 2023
HPCL Rajasthan Refinery	Pachpadra, India	96	Q3 2023
KPIC	Al Zour, Kuwait	480	Q3 2023
Heilongjiang New Ind. Inv. Longjiang CH.	Daqing, China	200	Q4 2023
Rizhao Landbridge Port PC	Rizhao, China	170	Q4 2023
Socar GPC	Sangachal, Azerbaijan	45	H2 2023
TANECO	Nizhnekamsk, Russia	45	2023
Sinopec Changling CO	Hunan, China	70	Q1 2024
Shandong Yulong PC	Longkou, China	808	Q1 2024
ExxonMobil	Guangdong, China	350	Q4 2024
Indian Oil Corp	Paradeep, India	270	2024
Brunei Hengyi Industries	Palau Muara Besar, Brunei	780	2025
CNOOC Ningbo Daxie PC	Zhejiang, China	150	Q1 2025

Closures

Company	Location	Nameplate Capacity (‘000 tonnes/year)	Time
ENEOS Corporation	Wakayama, Japan	117	2024
Seibu Oil	Yamaguchi	44	2025

PLANNED MAINTENANCE 2023*

The peak maintenance period appeared to be in March stretching into April in 2023, as compared with the second quarter of 2022.

This coincided with projections of a gradual pick-up in the economy, as China continued to grapple with rising COVID-19 infections post-lifting of movement controls. The infection rate was expected to rise further during the Lunar New Year holiday on 21 to 27 January.

Company	Location	Process	Nameplate Capacity (‘000 tonnes/year)	Period
YNCC	Yeosu, S Korea	Pygas	Around 150 Around 120	Jan-Feb Mar
LG Chem	Yeosu, S Korea	Pygas Toluene Deakylation	Around 225	Jan-Mar
Nippon Steel	Oita, Japan	Coal, Pygas, Reformate	Around 205	Feb-Mar
JFE Chem	Kasaoka, Japan	Coal	Around 100	Mar
Hanwha Total PC	Daesan, S Korea	Pygas	Around 225	Mar
GS Caltex	Yeosu, S Korea	TDP Reformate	Around 515 250	Mar-Apr
Idemitsu Kosan	Chiba, Japan	Reformate	Around 427	Apr
Foromosa Chemical & Fibres Corp (FCFC)	Mai Liao, Taiwan	Reformate/Pygas	Around 350	Apr
Mitsubishi Chem	Mizushima, Japan	Pygas	Around 222	May-Jun
Lotte Titan Chemical	Malaysia	Pygas	Around 157	May or June
Mitsui Chem	Chiba, Japan	Pygas	Around 145	Jul
Nippon ST & Sumikin	Hirohata, Japan	Coal	Around 71	Oct
SK Geo Centric (SKGC)	Ulsan, S Korea	Pygas	Around 200	Oct
CPC	Lin Yuan, Taiwan	Pygas	Around 208	Nov

Source: Market sources
*Subject to changes

CAUTION LOOMS
“We’re hopeful but also acutely aware China’s COVID-19 profile and management has been vastly different from other nations,” said a southeast Asia-based trader.

“Many of their elderly remain unvaccinated and that could escalate into a strain on their healthcare amid other resources. How well their economy, and the global economy, perform, is not that strongly optimistic.”

Additional reporting by Helen Lee, Jenny Yi, Jimmy Zhang, Josh Quah, Tina Zhang, Yoyo Liu

Thumbnail photo: A man on an electric cart carrying a load of styrofoam. Benzene is used primarily as a raw material in the synthesis of styrene, which in turn used to produce expanded polystyrene foam (EPS). (Source: Mark Schiefelbein/AP/Shutterstock)

Focus article by Angeline Soh