Cyclohexane    

*Millions of gallons per year. The bulk of commercial production is based on benzene hydrogenation, but some cyclohexane is recovered from petroleum streams by fractionation.

Chevron completed debottlenecking at its Port Arthur site, taking it from 38 to 50 million gallons annually, in the fourth quarter of 1998. Ultramar Diamond Shamrock completed engineering for a 58-million-gallon cyclohexane plant at its Three Rivers, TX, site, but canceled the project in mid-1998 because of the prevailing unfavorable economic conditions.

Exxon and Mobil merged in 1999 to form a new entity, ExxonMobil. The 65-million-gallon-per-year cyclohexane plant at Beaumont, TX, came on-line in 1999. Mobile had initiated the project, before the merger. That same year, Citgo debottlenecked its Corpus Christi, TX, plant, increasing capacity by 20 percent to 40 million gallons per year.

Chevron Corporation and Phillips Petroleum Company merged their chemical operations into a 50-50 joint venture in 2000. The new entity is called Chevron Phillips Chemical Company. In February this year, Chevron Phillips temporarily shut down its aromatics plant in Guayama, Puerto Rico, due to high naphtha costs and weak pricing for major aromatics. Concurrently, their 120 million gallon cyclohexane unit also went down. The plant is still off-line and presently undergoing a reconfiguration to process a lighter naphtha feed.

Profile last published 6/8/98; this revision 5/21/01.

DEMAND
1999: 431 million gallons; 2000: 440 million gallons; 2004: 476 million gallons, projected. Demand equals production plus imports (1999: 6 million gallons; 2000: nil) less exports (1999: 81 million gallons; 2000: 107 million gallons).

GROWTH
Historical (1995 - 2000): 2.5 percent per year; future: 2.0 percent per year through 2004.

PRICE
Historical (1995 - 2000): High, $1.44 per gallon, list, bulk, barges, works; low, $1.05, same basis. Current: $1.44, same basis.

USES
Adipic acid for Nylon-6/6, 54 percent; caprolactam for Nylon-6, 39 percent; miscellaneous, including solvents, insecticides and plasticizers, 7 percent.

STRENGTH
Demand for nylon (and hence cyclohexane) in engineering thermoplastics (resins and films) is growing at 5.8 percent annually. These materials are noted for their outstanding properties, including high tensile strength; excellent abrasion, chemical and heat resistance; and low coefficient of friction. Thus, they have particular utility in performing mechanical duties that traditionally relied on metal parts.

WEAKNESS
Demand for nylon in fiber production has softened, beginning in 1998 with the economic slowdown in Asia. The recent downturn in housing also negatively affects nylon consumed in fibers. In March, housing starts fell another 1.3%, to an annual rate of 1.61 million units. One year ago the rate stood approximately at 1.70 million units.

OUTLOOK
Cyclohexane's overall growth is expected to average about 2 percent annually over the next few years. The market is fairly mature, but balanced. Countering the decrease in demand from nylon for fibers, nylon resins continue with strong demand because of increasing penetration into existing uses and new application development. New routes to adipic acid, which do not depend on cyclohexane, are under development. These new processes represent a potential long-term negative effect on the cyclohexane market.