Published March 2014
Supply and demand for nitrobenzene throughout the world are closely tied to demand for aniline for methylenebis (4-phenyl isocyanate) (MDI) manufacture. Nitrobenzene is the primary raw material for aniline. Aniline, which itself is used primarily in MDI production, accounts for 98% of world nitrobenzene consumption. Other applications include use as a chemical intermediate for pharmaceuticals, solvents and dyes, and direct use as a solvent.
MDI is consumed along with propylene oxide polyols in polyurethane (PU) foam. These are mostly rigid foams and are used in construction and appliances. A much smaller amount of MDI is used in flexible PU foam used primarily in furniture and transportation. As a result, consumption of MDI, as well as aniline and ultimately nitrobenzene, largely follows the patterns of the leading world economies and depends heavily on construction/remodeling activity (residential and nonresidential), automotive production and manufacture of original equipment.
The following pie chart shows world consumption of nitrobenzene:
Robust demand for nitrobenzene in developing regions such as China and Southeast Asia over the last five years has been balanced by slower growth in North America and Europe. Overall, China (36%), Western Europe (24%), the United States (21% share) and Japan accounted for nearly 90% of global consumption in 2013. By 2018 Asia will represent 50% of nitrobenzene consumption worldwide, while China alone will account for slightly more than 40% of world nitrobenzene consumption as it gains global share in its downstream MDI business.
Markets driving MDI and hence nitrobenzene growth include construction/housing and transportation for insulation end uses, and rigid polyurethane foam use. There are no good substitutes for MDI urethane foam in insulation given its application flexibility and "R" (thermal resistance) insulation values. MDI/nitrobenzene growth is expected to proceed at more than 1.5 times that of world GDP over the next five years.
World nitrobenzene consumption is forecast to grow at an average annual rate of almost 5.5% over the next five years through 2018. Moreover, there will be continuing rapid 8% per year growth for nitrobenzene particularly in China as a result of the continued expansion of integrated nitrobenzene/aniline/MDI plants and the recovery from the recession. Chinas extraordinarily fast growth profile will be counterbalanced against slower growth in markets such as Europe, Japan and the Republic of Korea. Demand for nitrobenzene in the United States is forecast to grow at an average annual rate of 4.8% during 2013–2018. Strengthening demand in construction/remodeling activity and automotive production, and restoration of commercial inventory chains are economic factors driving this better-than-expected growth. Demand for nitrobenzene in Europe, including Central Europe and CIS, is forecast to grow at an average annual rate of 2.6% during 2013–2018. As a region, Asia is expected to experience the largest volume increases for nitrobenzene demand during 2013–2018 (expanding at nearly 6% per year). Increasing downstream MDI capacity/production is also a predominant factor for increased production and consumption of nitrobenzene/aniline.