Self-Sufficiency Rate of Aromatics Needs Urgent Increase

With the economic development in China, the import amount of
aromatics (benzene, toluene and xylene) and downstream products
is getting higher and higher. The output of pure benzene in China
reached the historical record of 3.061 million tons in 2005, but
it still falls far short of the equivalent domestic consumption
of nearly 8.0 million tons. The equivalent domestic consumption
of p-xylene has reached 8.45 million tons, but the supply amount
is only around 2.4 million tons and can only meet 28% of the
demand.
   The production of aromatics in China mainly relies on
reforming units in refineries and ethylene cracked gasoline
units/aromatic integrated units and coking units in
petrochemical plants. Besides, the toluene dealkylation and
toluene disproportionation/transalkylation technology can also
be used to convert toluene and C9/C10 aromatics into mixed xylene
and benzene. More than 50% of mixed xylene in large aromatic
integrated units is produced using this technology. It is
therefore a major method for the output increase of p-xylene.
Toluene selective disproportionation is also a new method for
the production of p-xylene.

1. Benzene

China has more than 50 pure benzene producers today. They mainly
include Sinopec Yangzi Petrochemical Company Ltd., Sinopec
Shanghai Petrochemical Company Ltd., CNPC Jilin Petrochemical
Company Ltd. and Sinopec Qilu Petrochemical Company Ltd. The
output in each producer is more than 100 thousand tons a year.
The output of pure benzene in China reached the historical record
of 3.061 million tons in 2005, an increase of 19.74% over 2004.
The output produced through the coking process was around 550
thousand tons, accounting for 18% of the total.
   As the capacity of benzene downstream products was relatively
small in previous years, the output of benzene could basically
meet the local demand and there was even some export. The
capacity of benzene downstream products has however expanded
rapidly in recent years. Plenty of newly constructed projects
and expansions of styrene, phenol, aniline and cyclohexanone
have, in particular, led to a drastic demand growth of benzene.
Although the capacity of pure benzene in China reached 3.2
million t/a at the end of 2005, the import amount of pure benzene
increased drastically, hitting a historical high of 255 thousand
tons in 2005. It is expected that the capacity growth of pure
benzene in China will still be slower than the demand growth in
downstream products and the import amount will increase
constantly.
   The capacity expansion of pure benzene in China in the next
few years will mainly come from new ethylene units, new aromatic
extraction units, expanded reforming units in refineries,
expanded aromatic units and increasing amounts of recovered
coking benzene. It is expected that new and expanded ethylene
units will increase the capacity of pure benzene by 470 thousand
t/a in 2006 and the capacity of pure benzene in China will reach
3.8 million t/a at that time.

2. Toluene

The output of toluene in China is quite large. Due to the great
demand of toluene in the production of benzene and xylene,
however, there is always a supply deficit in the toluene market.
The self-sufficiency rate of toluene is less than 60% today. The
import amount was 806 thousand tons in 2005.
   Besides the use in oil products, toluene is mainly used as
solvent and also in the production of TDI (toluene diisocynate),
methyl nitrobenzene and benzoic acid. The capacity of TDI in
China is 110 thousand t/a today and is expected to have the most
rapid expansion in the next few years. The 160 thousand t/a unit
constructed by BASF in Shanghai will start production in 2006
and the total capacity of TDI in China will therefore reach 270
thousand t/a at that time. It is expected that the capacity of
TDI in China will reach 660 thousand - 700 thousand t/a in 2009
and there will be an oversupply. The demand of toluene in the
TDI production will increase drastically in the next two or three
years.


3. Xylene

Mixed xylene in China is mainly used as solvent for paints,
coatings and dyestuffs and the consumption in this application
accounts for around 50% of the total. It is also used in organic
synthesis and pesticides. The consumption of solvent-grade
xylene in China is quite large. There is a supply deficit of mixed
xylene in the domestic market and 30 thousand - 40 thousand tons
of mixed xylene has to be imported from abroad a year.
   p-Xylene is a variety of xylene with the greatest demand in
China. The total capacity of p-xylene in China is 3.019 million
t/a today. Major producers include CNPC Liaoyang Petrochemical
Company Ltd., Sinopec Zhenhai Refining & Chemical Company Ltd.
and Sinopec Tianjin Petrochemical Company Ltd. In spite of a
constant growth made in both the capacity and the output, there
is a considerable supply deficit of p-xylene due to the rapid
development of the polyester sector in recent years. Great
quantities have to be imported from abroad a year. The output
of p-xylene in China was around 2.3 million tons in 2005 and the
import amount reached 1.608 million tons. China also imports
great quantities of p-xylene downstream product PTA (purified
terephthalic acid) and the import amount of PTA was 6.491 million
tons in 2005. Great attention should be paid to the heavy import
dependence of p-xylene. China has accelerated the construction
of p-xylene units in recent years. With the completion of new
p-xylene projects, the capacity of p-xylene in China will
increase by around 4.1 million t/a from 2006 to 2008.
   The capacity of p-xylene in China is expected to reach 4.0
million t/a in 2006 and the supply deficit will be 1.6 million
tons. The import amount of p-xylene is expected to be more than
2.5 million tons in 2010. Due to the rapid development of the
polyester fiber production, China will become one of the largest
p-xylene and PTA importers in the world.
   o-Xylene in China is mainly used to produce phthalic
anhydride. China imported 329.3 thousand tons of o-xylene, 170.2
thousand tons of phthalic anhydride and 370 thousand tons of
dioctyl orthophthalates in 2005. The equivalent consumption of
o-xylene reached around 1.1 million tons and the domestic output
could only meet 53.5% of the demand. There is therefore also a
heavy import dependence of o-xylene in China.
   There is a considerable supply deficit in the aromatic market
in China. To reduce the import dependence of aromatics, China
will accelerate the development of ethylene production and oil
refining sectors during the Eleventh Five-year Program period
(2006-2010). It is expected that the tense supply of aromatics
in China will be eased to a certain extent in the next 5 years.

Table 1  Supply and Demand of Pure Benzene in China
                in Recent Years            (thousand tons)
Year    Output    Import    Export    Apparent consumption
2000    1 847    75    90    1 832
2001    1 970    62