Aniline  

*Millions of pounds per year. Most aniline is produced through the hydrogenation of nitrobenzene. In Bayer's process for producing iron oxide pigments, the reduction of nitrobenzene with iron filings yields aniline as a coproduct. Sunoco’s aniline process (Halcon process) features ammonolysis of phenol, with diphenylamine as a coproduct. About half the aniline capacity is used captively for production of 4, 4-methylene diphenyl diisocyanate (MDI), the other half going to the merchant market.

Sunoco acquired Aristech Chemical in 2000, from Mitsubishi Corp.

Rubicon added an additional 330 million pounds per year of capacity at Geismar, La., in first quarter 2000, bringing its total capacity to 870 million pounds per year. Rubicon is a 50/50 joint venture between Huntsman and Uniroyal Chemical. Uniroyal is a subsidiary of Crompton Corp., acquired in 1998.

In the third quarter of 2000, BASF brought on stream a second aniline plant at Geismar, La., with a capacity of 265 million pounds, raising total capacity to 455 million pounds per year.

First Chemical is contemplating adding another 250 million pounds of capacity at Baytown, Tex., in 2003 or 2004, depending on Bayer’s future requirements for MDI production.

Profile last published 2/8/99; this revision, 1/21/02.

DEMAND
1999: 1,606 million pounds; 2000: 1,815 million pounds; 2004: 2,115 million pounds, projected. Demand equals production plus imports (1999: 26 million pounds; 2000: 11 million pounds) less exports (1999: 38 million pounds; 2000: 58 million pounds).

GROWTH
Historical (1995 - 2000): 6.5 percent per year; future: 3.9 percent per year through 2004.

PRICE
Historical (1995 - 2000): High, $0.50 per pound, tanks, f.o.b. works; low, $0.45, same basis. Current: $0.45 to $0.50, same basis.

USES
MDI (4, 4-methylene diphenyl diisocyanate), 85 percent; rubber-processing chemicals, 9 percent; herbicides, 2 percent; dyes and pigments, 2 percent; specialty fibers, 1 percent; miscellaneous, including explosives, epoxy curing agents and pharmaceuticals, 1 percent.

STRENGTH
MDI has been the driving force behind the growth of the aniline business since the early 1980s. Primarily, MDI is used to produce rigid polyurethane foam and polyurethane elastomers. In 2000, MDI accounted for 85 percent of total aniline demand in the U.S. Most recent MDI projects have been back-integrated with an aniline plant or long-term supply agreements.

WEAKNESS
The prolonged downturn in the U.S. economy has seriously affected demand for polyurethane raw materials, including MDI, which directly affects demand for aniline. Overall sales of MDI related products used in insulation in a variety of industries are down 6 percent through the first half of 2001 year versus 2000. The decline seems common across all rigid polyurethane foam applications, with the construction market the slowest.

OUTLOOK
Though somewhat depressed by comparison to its performance in recent years, aniline should continue to produce better than GDP growth for the next four years, forecasted at 3.9 percent annually. The major consuming use, MDI, is tied to the depressed economic conditions, but MDI growth continues to expand as new uses of polyurethanes are promoted outside traditional construction and refrigeration sectors. The supply side of aniline is in excellent shape. Plant operating rates are about 80 percent and feed stock supplies of nitrobenzene and phenol are more than adequate to meet demand.