Published August 2016
Cumene is produced from benzene and propylene, accounting for 20% of benzene demand and 4% of propylene demand. Cumene is made primarily for phenol and acetone production. Phenol/acetone production consumes approximately 98% of all cumene globally, so cumene demand is very closely tied to the phenol market. Cumene can also be used as a blending component in the gasoline pool, especially as a way to avoid benzene restrictions in gasoline. When cumene and its feedstocks become undervalued relative to energy, gasoline blenders can use cumene as a blending component, since it has a high octane rating. The use of cumene as a blending component will occur when its price falls below its alternate octane value.
The following pie chart shows world consumption of cumene:
Phenol is used mostly to make BPA, phenol-formaldehyde resins, and nylon-KA oil. Nearly half of global phenol consumption is for the production of BPA; BPA, in turn, is driven primarily by demand for polycarbonate resins. Polycarbonate has been a rising market over the past few years, keeping steadily above GDP growth rates; this market is expected to continue to grow at almost 3% per year in the next five years. The second-largest market for phenol is the production of phenol-formaldehyde (PF) resins, which accounted for about 28% of phenol demand in 2015; PF resins are used mainly in the construction industry. Nylon-KA oil is the third-largest market for phenol, making up about 13% of the global market.
Regionally, the largest cumene market is Northeast Asia (43%), followed by North America and Western Europe (22% each). The Middle East will be one of the fastest-growing markets, with consumption increasing at an average annual rate of almost 15%, driven by the Petro-Rabigh plant addition in 2017. Capacity is expected to grow even faster, at an average annual growth rate of approximately 18.5% to 2020. However, the cumene market is driven by phenol market dynamics and the new capacity additions for cumene/phenol/acetone planned for the next five years will exceed the expected demand growth and cause operating rates to drop from 98% to 83%.