CEH Report

Table of Contents

Abstract

Toluene is an aromatic compound used in the manufacture of benzene, p-xylene for polyethylene terephthalate (PET) solid-state resins, and toluene diisocyanates (TDI) for polyurethane applications, and it is widely used as a solvent. The majority of toluene production is unrecovered (i.e., not isolated from other aromatic constituents) and is consumed as a constituent of various refinery streams. Additional quantities of isolated toluene are blended into unleaded gasoline for octane improvement. However, this report covers only toluene that is recovered for subsequent processing in chemical operations.

Global recoverable toluene capacity is forecast to increase by 7.6% over the next five years. Although Europe and North America may experience slight capacity declines from permanent shifts in ethylene feedstock over the forecast period, reflected declines in global share will come as a result of capacity expansions in the Middle East and Asia. Of the countries included in Other Asia, Singapore is the only one adding capacity over the forecast period.

With the start of the global recession in late 2008 and carrying into 2009, toluene production volumes suffered throughout much of the industrialized regions, dropping an estimated 15% from 2007 values. However, demand in developing regions such as China, Thailand and the Middle East saw continued growth during this period. As global economies begin to slowly recover, toluene markets are expected to improve.

The following pie chart shows world consumption of toluene:

Hydrodealkylation (HDA) and disproportionation of toluene (TDP) accounted for 60% of total toluene demand in 2009. Because of adjustments in operating rates for HDA/TDP units, toluene demand in this applications can fluctuate between 60% and 70% of total demand. Strong demand for benzene and p-xylenes derivatives between 2004 and 2007 led to increased operation of HDA/TDP units before the economic downturn in 2008. Although global benzene demand is expected to slow near the end of the forecast period, demand growth for p-xylenes is anticipated to remain steady. Toluene demand for benzene/xylenes is forecast to increase 7.4% per year on average between 2009 and 2014, following the start-up of facilities in Central and Eastern Europe, India and Singapore.