Nitrobenzene      

*Millions of pounds per year nitric acid, generally by the direct nitration of benzene using a mixture of nitric acid and sulfuric acid. Capacities are balanced with nameplate aniline capacity in most cases.

During the first quarter of 2000, Rubicon brought on-stream a new 440 million pound nitrobenzene plant at Geismar, La. Concurrently, expansion of aniline and MDI production took place. 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., and at the same time, doubled its nitrobenzene capacity to 600 million pounds.

First Chemical is contemplating increasing aniline capacity at Baytown, Tex., in 2003 or 2004. If the project goes ahead, another 340 million pounds of nitrobenzene capacity will be added to the site. First Chemical is a subsidiary of ChemFirst, Inc.

Profile last published 2/15/99; this revision 4/22/02.

DEMAND
1999: 2,235 million pounds; 2000: 2,526 million pounds; 2004: 2,950 million pounds, projected. Foreign trade is negligible, if any exists.

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

PRICE
Historical (1996 - 2001): High, $0.35 per pound, list, tanks, works; low, $0.30, same basis. Current: $0.30 to $0.35, same basis. (Very little nitrobenzene is sold in the merchant market.)

USES
Aniline, 97 percent; miscellaneous uses (p-aminophenol, dyes and pigments and as a chemical intermediate and solvent), 3 percent.

STRENGTH
MDI has been the driving force behind the growth of the aniline business, and consequently nitrobenzene, since the early 1980s. Primarily, MDI is used to produce rigid polyurethane foam and polyurethane elastomers. Most recent MDI projects are back-integrated with aniline and nitrobenzene plants 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. In 2000, MDI accounted for 85 percent of total aniline demand in the U.S. Overall sales of MDI related products used in insulation in a variety of industries were down 7 percent in year 2001, 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, nitrobenzene 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 nitrobenzene is in excellent shape. Plant operating rates are about 85 percent and feed stock supplies of benzene, nitric and sulfuric acids are more than adequate to meet demand.