Disruption in Aromatics: How will unprecedented capacity growth impact the market in 2019?
Aromatics are one of the basic building blocks of the petrochemical industry, with benzene, toluene, and xylenes the most important of these chemicals commercially. Over the past 3 years, aromatics producers have seen good profitability on the back of relatively low oil prices and a strong demand in China for both para-xylene (PX) and to a lesser extent benzene.
The PX market is expected to experience huge disruption in 2019 with the commissioning of new integrated aromatics facilities in China which represent a step change in world scale plant capacity and will boost global PX capacity by almost 20 percent in a single year and 38 percent to 2021.
The scale of this capacity build is expected to narrow the immense supply deficit in China, transforming global trade flows and triggering a massive fall in operating rates for non-integrated producers. The new ‘crude to PX’ plants will bring excess benzene and additional refined products to the market, leading to an impact across the aromatics supply chain.
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