SUMMARY

This chapter is focusing on feasibility study and literature survey where it

included market assessment of world production in worldwide, regional and also

national. The biggest production of toluene plant is dominated by USA about

6230MTPA. In Malaysia, there is only two company that produce toluene which it is

being exported to overseas since the used of toluene is not as big as China and USA.

As for the raw material being used is crude oil from Malaysia which is Tapis Blend

44o due to its high quality. Then it continues with current and future price where the

current value for toluene is from 920- 965 USD/ MT in Asia market while the future

price was estimated would be increases up until 2018 based on the trend graph. The

global toluene production in year 2002 was dominated by North America in 400/0 and

increasing until 2008 for 520/0 which shows the increases demand of toluene for every

year based on the widely used of it. About the import, Malaysia crude oil, Tapis Blend

44o was selected due to its high quality and cut the shipping cost of it. The country that

was chosen as a customer is China due to high demand of Toluene and shipping cost

can be cut down because of the distance is shorter compared to South Korea that have

higher demand on Toluene. All the data in this chapter present as a basis for the next

chapter.

1

2.1 MARKET ASSESMENT

2.1.1 PRODUCTION: WORLDWIDE

Global production rate of toluene in worldwide is cycled depends on the

fluctuating demands. For the year’s 1979 to1981, the world production of toluene was

more than 10 000 metric tonne. It dominated by USA about 6230 MTPA, Japan 2193

MTPA and Western Europe 1666 MTPA. World consumption of toluene in 2009

were each almost 18.4 million metric tons. Global production capacity of the 2002–

2010 periods is expected to increase at an annual average rate of 4.5% for toluene. In

Western Europe, the production of Toluene is 2.6 million tonne in 2002 and still

remains constant at 2008. At North America the total capacity in 2008 is about 10.5

million tonne, 4.5 million tonne increase from the 2002. From year 2002 until 2008,

the 0.7 million tonne capacity come from Middle East. The total production of toluene

in 2002 is about 18.9 million tonne. And the amount is increase to 24.5 million tonne

in 2008, (Forecast of Global Supply).

Table 2.1: Production of Toluene in Europe 1994 (in 103 T)

Country Producers From Reformate

From pyrolysis Gasoline

From Coal Total

Australia Veest 0 0 4 4Belgium Supar 0 65 8 75France Atocleem,

Shell30 40 0 65

Germany Shell, PEK, DEA,

475 650 60 1188

U.K B.P, Shell 465 70 18 558Italy Enichen 290 205 0 495

Nederland Exxon 255 0 0 255Portugal Petrogal 140 0 0 140

Spain Cepsa 280 0 0 280Total 1005 845 92 2729

2

Table 2.2: Production of Toluene in worldwide (in million T)

Country Capacity 2002 Capacity 2008 Increasing Growth rateWestern Europe

2.6 2.6 0.0 0.0%

North America

6.0 10.5 4.5 9.9%

Middle East 0.7 0.7 0.0 0.0%Total 18.9 24.5 5.6 4.5%

Table 2.3: Production of Toluene in US

Producer Location Capacity, 106gal

Atofina Petrochemicals Atofina Petrochemicals 50BP Chemicals Texas City, Tex. 25

Chalmette Refining Chalmette, La. 110Citgo Corpus Christi, Tex.; Lemont, Ill. 55

Clark Refining and Marketing Lima, Ohio 105

Chevron Phillips Chemical Port Arthur, Tex 45Chevron Phillips Chemical Sweeny, Tex.; Guayama, P.R. 120

Dow Chemical Plaquemine, La 15El Paso Energy Corpus Christi, Tex.; Westvllie, N.J. 65

Equistar Chemicals Alvin, Tex.;Channelview, Tex.;Corpus Christi, Tex.

70

ExxonMobil Baton Rouge, La.;Baytown, Tex.;Beaumont, Tex

275

Flint Hills Resources Corpus Christi, Tex. 160Frontier El Dorado Refining El Dorado, Kan 10

Hovensa St. Croix, V.I 900Shell Chemical Deer Park, Tex. 35

Sunoco Marcus Hook, Pa.;Philadelphia;Toledo, Ohio

145

Tosco Alliance, La. 65Total 2,660

3

2.1.2 PRODUCTION: REGIONAL

Asian aromatics producers of toluene are about 5.6 million tonne at 2002. Over

six years, the production is increasing about 6.5 million tonne per year for 2008

production. This 2.3% increasing of toluene depend on the world market demand and

the increasing number of plant that produce benzene, toluene and xylene (BTX). China

is the primary export and import of toluene. By this year, the total capacities were 6

million tonnes per year. Over six year from 2002 until 2008, total production of

toluene in Asia region is about 5.6 million tonnes in 2002 and increasing to 6.5 million

tonnes in 2008. This production is comes from South Korea 1.9 million tonnes,

Taiwan produce 0.1 million tonnes, India produce about 0.3 million tonnes, Japan 1.6

million tonnes, china is produce 1.0 million tonnes in 2002 and increase their

production to 1.7 in 2008. Another source, 0.7 million tonnes in 2002 and 0.9 million

tonnes comes from ASEAN country, (Forecast of Global Supply).

Country Production2002

Production 2008

Increasing(02-08)

Growth rate(02-08)

South Korea 1.9 1.9 0.0 0.0%Taiwan 0.1 0.1 0.0 0.0%China 1.0 1.7 0.7 8.9%

ASEAN 0.7 0.9 0.2 7.1%India 0.3 0.3 0.0 0.0%Japan 1.6 1.6 0.0 0.0%Total 5.6 6.5 0.8 2.3%

Table 2.4: Production of Toluene in Asia (million T)

4

2.1.3 PRODUCTION: NATIONAL

Production of toluene in Malaysia is still lower compare to another country.

Toluene produced as the olefins, but it only the secondary produce from the aromatic

compound. The primary production from this plant is more to produce ethylene and

propylene. There are only two companies that produce toluene in Malaysia which is

Titan Chemicals Corporation Bhd and Aromatic Malaysia Bhd. The production form

this company is about 200 MTPA and 150 MTPA. The production from this company

used to supply the domestic used and export to another Asian country especially

China, Singapore and Japan, (Titan chemical cooperation).

Table 2.5: Production of Chemical product in Malaysia

Company ethylene propylene HDPE/LLDPE HDPE

LDPE PP Toluene

Titan 630 334 205 105 220 370 200Ethylene Malaysia

400 - - - - - -

MTBE Malaysia

- 300 - - - - -

Polypropylne Malaysia

- - 250 - - - -

Polypropylne malaysia

- - - - - 80 -

Optimal Olefins

600 100 - - - - -

Petlin - - - - 225 - -

Aromatic Malaysia

- - - - - - 154

*(-) no production

5

2.2 CURRENT AND FUTURE PRICES

2.2.1 CURRENT PRICES

Table 2.6: Asia Toluene Price

Price range Price intervalFOB Korea USD/MT -15 835-850 -15 915-925

CFR N.E. Asia USD/MT -5 865-885 -15 925-950CFR S.E. Asia USD/MT -15 860-880 -20 935-960

E.China CNY/MT n/c 7100-7200 n/c 7350-7400CFR India USD/MT n/c 870-890 -10 960-985CFR China USD/MT -10 870-885 -15 925-945

Asia toluene price is decreasing from last month. However, this is not a huge

drop maybe because huge supply arrived.

Table 2.7: North America Toluene Price

Price range

Price interval

USD/MT

C GradeFOB

Barges

USD/Gal -0.10 2.50-2.75 -0.03 2.65-2.86 761.83-838.01

N GradeFOB

Barges

USD/Gal -0.18 2.55-2.90 -0.03 2.85-2.32 777.07-883.72

North America price also drop because of following the rest of the aromatics

sector lower during the week.

Table 2.8: Europe Toluene Price

Price range Price intervalFOB NWE FEB USD/MT +25 880.00-880.00 +10 n/c

FOB RDAM USD/MT -30 810.00-867.00 -13 880-900CIF MED USD/MT -30 830.00-887.00 -13 900-920

6

2.2.2 FUTURE PRICES

With market of Toluene seems to be stable the prediction of Toluene can be

estimated. There will be times when the price become higher and lower. It is important

to predict the price and supply-demand chain to control the output of the plant.

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

20

40

60

80

100

120

140

160

180

200

Year

Price

Diff

rere

nce

DM/t

Figure 2.1: Toluene Price Prediction

7

2.3 DEMAND AND SUPPLY OF THE TOLUENE

2002 2003 2004 2005 2006 2007 20080

5

10

15

20

25

Year

Mill

ion

Ton

Figure 2.2: Global Toluene Demand

From 2002 to 2008, toluene demand has been increased from 15.0 MT to

19.1MT. It is increased 4.1MT in this 7 years and the growth rate is 4.1%. So,

according to this trend, in 2010 Toluene will further increase.

2002 2003 2004 2005 2006 2007 20080

1

2

3

4

5

6

7

8

Year

Mill

ion

Ton

Figure 2.3: Asia Toluene Demand

Asia shown tremendous demand of toluene is this following years. It has

increased from 4.4MT to 7.3MT by 2.9MT. The growth rate is 8.9%

8

2002 2003 2004 2005 2006 2007 20085.6

5.8

6

6.2

6.4

6.6

6.8

7

North America Toluene Demand

Year

Mill

ion

Ton

Figure 2.4: North America Toluene Demand

North America Continent also show increasing trend in demand by 0.7MT from 6.1MT to 6.8MT.

2002 2003 2004 2005 2006 2007 20081.741.761.78

1.81.821.841.861.88

1.91.92

Europe Toluene Demand

Year

Mill

ion

Ton

Figure 2.5: Europe Toluene Demand

Based in figure 1.5, Europe has shown decreasing in demand of toluene. Rather from 1.7MT in 2002 it has been dropped to 1.6 in 2008.

9

Figure 2.6: Global Toluene Production 2002

Total world production of toluene in 2002 is 18.9MT. North America is the

largest manufacturer as it produces 6MT. Asia is also large distributor as sum of all

country in Asian is 5.6MT. Next is Europe which is 2.6MT. Middle East total

production is 0.7MT in 2002.

South Korea9%

Taiwan1%

China8%

Asean4%

India2%

Japan8%

Western Europe13%

North America52%

Middle East3%

Figure 2.7: Global Toluene Production 2008

In 2008, North America has increased its production of Toluene as it produces

more than half of world production which is 10.5MT from 24.5MT. Asian country

also has shown increasing in production to 6.5MT. Other countries still unchanged

production of toluene. It means that Toluene is still good chemicals to sell as world

show increasing in demand and supply.

10

Table 2.9: Supply and Demand Balance of Toluene

Asia Total Western Europe

North America Middle East

2002 0.1 0.2 -0.1 02008 -1.7 0.4 -0.4 0

From 2002 to 2008, Asia is still in demand for Toluene by 1.7MT. It means

that industry of toluene really growth in Asia. Even North America production of

Toluene has been doubled it still need toluene by 0.4 in 2008. Since the beginning the

toluene supply is not enough at North America. Meanwhile, Western Europe has

produced excessive of toluene by 0.2MT from 0.2MT in 2002 to 0.4 MT. Middle East

toluene supply-demand is not changing. Asia and North America is the future market

of toluene in these incoming years.

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2.4 IMPORTS AND EXPORTS

2.4.1 IMPORTS

Figure 2.8: Crude oil prices (WTRG Economics)

Based on the process that was chosen, the raw material that need to be use is

crude oil. The figure above gives a brief explanation on world crude oil prices from

1970 to August 2009. From the figure2.8, world crude oil prices are dependent on the

world situation. The price of the latest world crude oil is kept on decreasing from 2008

to August 2009 after the war in Iraq. The decreasing of world crude oil price gives a

positive impact to our Toluene plant because crude oil is the main raw material that

used to form Toluene.

12

Table 2.10: World Crude Oil Prices (Dollars per Barrel)

Crude Type Latest Price (13/08/2010)Total World 76.77United States 74.50OPEC* Average 77.52Abu Dhabi, Murban 39º 78.25Algeria, Saharan Blend 44º 79.96Angola, Cabinda 32º 78.75Dubai, Fateh 32º 76.39Ecuador, Oriente 30º 71.30Iran, Heavy 30º 76.07Iran, Light 34º 77.30Iraq, Kirkuk 36º 76.89Kuwait, Kuwait 31º 74.54Libya, Es Sider 37º 77.63Neutral Zone, Khafji 28º 77.73Nigeria, Bonny Light 37º 80.87Nigeria, Forcados 31º 80.79Qatar, Dukhan 40º 77.81Saudi Arabia, Arabian Heavy 27º 75.23Saudi Arabia, Arabian 77.73Saudi Arabia, Arabian Medium 31º 76.08Venezeula, Bachaquero 17º NAVenezeula, Bachaquero 24º NAVenezuela, Tia Juana Light 31º 78.02Non-OPEC* Average 75.76Australia, Gippsland 42º 79.99Brunei, Seria Light 37ºCameroon, Kole 34º 78.28Canada, Canadian Par 40º 70.99Canada, Heavy Hardisty 22º 66.73Canada, Lloyd blend 22ºChina, Daqing 33º 77.08Colombia, Cano Limon 30º 79.25Egypt, Suez Blend 33º 73.82Gabon, Mandji 30º NAIndonesia, Minas 34º 79.68Malaysia, Tapis Blend 44º 80.94Mexico, Isthmus 33º 77.91Mexico, Maya 22º 70.28Norway, Ekofisk 80.28Oman, Oman Blend 34º 76.69Russia, Urals 32º 77.36United Kingdom, Brent Blend 38º 80.64

13

Based on the prices of crude oil from all the supplier around the world, our

plant have chosen crude oil that originally from Malaysia which is Tapis Blend 44 o

crude oil that is 80.94 dollar per barrel . Malaysia crude oil is one of the best crude oil

in the world. The price is higher than other country crude oil. The reason Tapis Blend

44o so expensive is the fact that it contains very little impurities, the worst of which is

Sulphur. The combustion of fossil fuels such as diesel, petrol and coal produces

sulphur dioxide and releases it into the atmosphere which when reacts with water

produces sulphuric acid, the main component of acid rain. Even though the price is

higher, our plants choose Tapis Blend 44o due to its high quality and we can cut the

time and cost for shipping it.

14

2.4.2 EXPORTS

Table 2.11: Global Toluene Demand (Unit: Million Tons)

Demand Increase2002-2008

Growth Rate (%)

2002-20082002 2008

Global Total 15.0 19.1 4.1 4.1Asian Total 4.4 7.3 2.9 8.7South Korea 0.5 1.4 0.8 17.3Taiwan 0.3 0.3 0.0 1.7China 1.3 2.8 1.5 13.2ASEAN 0.4 0.7 0.2 10.3India 0.4 0.6 0.2 7.0Japan 1.5 1.6 0.1 1.2Western Europe

1.9 1.8 -0.0 -0.3

North America 6.1 6.8 0.7 1.7Middle East 0.6 0.7 0.0 1.0

Based on the table above, it shows the world demand on Toluene and the

differences of the world demand on Toluene between 2002 and 2008. We can see that

the highest demand is in South Korea, 17.3% and followed by China, 13.2%. The

lowest demand is in Western Europe that was decreasing from 1.9 to 1.8 which is -

0.3%. Thus, we have decided to choose china as our main customer due to the high

demand in toluene. The growth rate demand of toluene also is keeping on increasing in

China because of the chemical industry that demanding for Toluene is getting bigger.

Moreover, the shipping cost can be cut down because of the distance is shorter

compared to South Korea that have higher demand on Toluene.

15

2.5 PLANT CAPACITY

The quantity of the desired production of the toluene plant is 95 MTPA. It has

been chosen to be for 330 working days.

Production programmed of the plant is set as follows.

75% of plant capacity during the first year,

85% of plant capacity during the second year, and

100% of plant capacity starting from the third year.

The production programmed is set by not considering Sundays and public holidays.

It has been decided to develop toluene plant with maximum capacity of

130MTPA. It is because the demand might be increase by years. So, the plant capacity

must be higher than the desired production for the first year.

16

2.6 ECONOMIC POTENTIAL

Current toluene price= RM 2784 / MT

Current crude oil price= RM 1631.4 / MT

Economic potential = product price – raw material

= toluene price – crude oil price

= RM 2816 / MT – RM 1631.4 / MT

= RM 1184.6 / MT

Profit = RM 1184.4 / MT × 95 MT / year

= RM 112537/ year

CONCLUSION

As a conclusion of this chapter:

The biggest production of toluene in worldwide is dominated by USA while in

regional is by South Korea and in national is dominated by Titan.

The demands of toluene always increase but after sometimes it drop due to the

some circumstances.

Maximum toluene plant capacity is 130MTPA.

Profit value is RM 109492.85 / year.

17

REFERENCES

Chemical Division Manufacturing Industries Bureau Ministry of Economy,

Trade and Industry. (2004) Forecast of Global Supply and Demand Trends for

Petrochemicals Products. [Online] Available from World Wide Web

http://www.meti.go.jp/english/information/.../c0404PetroProe.pdf [Accessed

22nd August 2010]

Forecast of Global Supply and Demand Trends for Petrochemical Products

(2008) [Online]. Available from World Wide Web:

http://www.meti.go.jp/english/information/downloadfiles/cForecastPetrocheme

.pdf [Accessed 22thAugust 2010].

Kirk-Othmer Encyclopedia of Chemical Technology, (volume 25). Toluene

production, 175

Titan Chemical Cooperation Bhd. “Make Hay While The Sun Shines” (2006)

[Online]. Available from World Wide Web:

http://eas.taonline.com.my/research/dco/ipo_5103_050606.PDF[Accessed

21thAugust 2010].

U.S Energy Information Administration (2010).World Crude Oil Prices.

[Online] Available from World Wide Web:

http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.html[Accessed 21st August

2010]

Williams J.L (2010). Oil Price History and Analysis. [Online]Available from

World Wide: http://www.wtrg.com/prices.htm[Accessed 20th August 2010]

18