Toluene is an aromatic hydrocarbon. Other common names are methylbenzene, phenylmethane, or formerly toluol. With this current market study, Ceresana offers transparency regarding the development of the entire global market for toluene. As toluene can be used for a wide range of applications, developments of the market for this petrochemical are subject to a variety of influences. Toluene is used as a fuel additive, solvent, basic material for the production of other aromatics and for the manufacturing of various chemicals such as toluene diisocyanate (TDI). The market value is considerable: In 2013, about US$24.5 billion were generated with the sale of toluene.
Widespread use in benzene and xylene
Toluene mainly occurs as by-product in steam cracking or catalytic reforming. As the chemical applications of toluene are limited, a large share of the toluene produced worldwide is processed into benzene and xylene. Technologies used are the HDA process (hydrogen dealkylation), TDP process (toluene disproportionation) and the transalkylation of toluene. While the HDA process only yields benzene, both the TDP process and transalkylation are also used to manufacture xylene. In 2013, about 56% of global consumption of toluene were accounted for by the production of benzene and xylene.
Western European refineries under pressure
Demand for fossil fuels is falling in many industrialized nations. This partly due to more fuel-efficient vehicles, and partly to a trend towards the consumption of biobased fuels such as ethanol. Operators of refineries in North America and Western Europe are faced with increasing competition of the modern refineries that are put into operation in Asia-Pacific and the Middle East. Possible closures of refineries could lead to a reduction of the supply of the by-product toluene.
TDI more and more common
Fuelled by an increasing demand for polyurethane (PUR) across the world, a significant expansion of production capacities for TDI (toluene diisocyanate) can be observed, in Asia-Pacific in particular. In this region, demand for toluene in the production of TDI is projected to increase by more than 4.4% p.a. until 2021. This development is reinforced by the development of new PUR materials for an increasing number of applications, as this study explains in great detail.
Immense paraxylene demand in Asia-Pacific
The strong increase of global demand for paraxylene renders the production of xylene commercially interesting. Crucial for the development of the worldwide market for paraxylene is the development in Asia-Pacific that accounts for almost 80% of global demand. Paraxylene is mainly processed into terephthalic acid (TPA), which in turn is largely utilized to manufacture polyesters or PET. The largest sales market is the segment polyester fibers, in Asia-Pacific in particular, which saw a strong upturn in recent years.
More benzene from the Middle East and Africa
Benzene producers in the Middle East and Africa are likely to significantly increase their share of worldwide benzene production. As demand in these regions is increasing less dynamically than production, a large part of Middle Eastern/ African benzene output is directed to the world market. This puts increasing pressure on producers in Western Europe and North America, and will curb demand for toluene in the production of benzene.
