2.

0 Market Survey

Market Condition of Cumene

Cumene is widely acquired for its applications and demands in production of phenol
and acetone , which consumes about 98% of the cumene produced in the industry , followed
by other industrial chemicals. It has a variety of end-use industries such as polycarbonate,
bisphenol-A, and phenolic resins . Hence , cumene market demand is heavily dependent on the
market condition of both phenol and acetone .

Based on reports , the global cumene market was valued at USD 18,881.5 million in
2016 and expected to reach up to USD 28,219.1 million by 2025 (Grandview Research , 2017).
This is mainly due to the rising demand for phenol for various end use applications such as
construction materials, pharmaceuticals, and adhesives, together with advancements in the
chemical production processes , which drives the growth of cumene market.

The global demand for cumene are distributed into 3 main regions which are in Europe ,
America and Asia . Based on the report on the distribution of global cumene demand market ,
Asia region was the leading market and accounted for the largest cumene demanding market
of 46% in 2017 , followed by Western Europe of 21% and North America of 20% . Figure 2.1
shows the distribution of the market demands of cumene globally.

Figure 2.1 : Distribution of global cumene demand

 In the list of countries that export cumene in 2017, Netherlands tops the list with an
export quantity of 519,305 tons followed by Japan with 517,621 tons and Singapore with
429,777 tons. For imports of cumene, Belgium is the largest import of cumene a total import
quantity of 827,755 tons followed by China with 584,295 tons and Taiwan with 151,050 tons .

Asia Market Trend

Over the years, Asia Pacific region has emerged as a largest consumer for cumene,
which accounts already for almost 47.8% of the world cumene demand in 2016 and yet to grow
at an estimated CAGR of 4.3% from 2017 to 2025.. Among the Asian region , China is the
largest consumer of cumene and its consumption is expected to increase at a rate of almost 12%
annually from 2017 to 2022 .The demands in Asia are increasing greatly mainly due to the
trend of using heavy feedstock such as benzene instead of lighter naptha . In China , the cumene
demand is heavily dependent on the growing number of aromatic facilities, that are produced
from acetone and phenol. Besides that , product of phenol such as bisphenol-A in industries
are widely used to produce water bottle, DVD, and sport equipments which indirectly increases
the market needs of cumene as an intermediate product to manufacture high-end quality
products.

In Malaysia, cumene are used commonly in the production of rubber, epoxy resins and
polycarbonate sheet. There are a number of companies in Malaysia that uses cumene to produce
various products. For example , companies such as Everise Stellar (M) Sdn Bhd, Golden
Millenium, and YS Polycarbonates utilises cumene to produce polycarbonates and
polycarbonate sheets as end-product. Cumene is mainly used to produce phenol , hence in
Malaysia there are phenol manufacturing company like MITSUI Chemicals that have plants in
Selangor, Wilayah Persekutuan Kuala Lumpur and Melaka.

Market Supply of Raw Materials

Both benzene and propylene as the raw materials for cumene production have affected
the production rate globally . In Malaysia, the raw materials for cumene production, benzene
and propylene are readily supplied and can be widely found in petroleum . Based on the
Petrochemical Industry in Malaysia report published by Federations of Malaysia
Manufacturers, benzene and propylene are widely produced locally in West Malaysia.
Competitive prices of the feedstocks has made Malaysia a viable petrochemical hub in ASEAN
region that attracted investments more than USD $9 billion from leading petrochemical and
chemical manufacturers .

Table 2.1: Production of Petrochemical Products

Petrochemical Products Capacity (mtpa) Company

Benzene 775,000 Titan Petchem (M) Sdn Bhd
Propylene 854,000 Titan Petchem (M) Sdn Bhd

As shown in Table 2.1, Titan Petchem (M) Sdn Bhd produces both the main raw
materials of cumene , benzene and propylene. The raw material plants are both located in Pasir
Gudang, Johor . The availability and price of raw materials for feed streams play an important
role in determining the plant location. In most cases for production plants, proximity to
chemical operations of raw materials is an added advantage to help reduce transportation
logistics cost .

Production rate of cumene

In the year 2012, cumene production supply is recorded as 3.138 million tonnes and
based on the growth rate of global cumene demand, the cumene supply is expected to reach
about 14 million tonnes in 2020. The development of global production and demand of cumene
has been largely dominated by established countries. As depicted in Table 2.2 , in 2012 and
2020

Table 2.2: World Cumene Supply and Demand

Year 2012 Year 2020

Cumene Supply (tonnes) 3,138,857 14,000,000
Cumene Demand (tonnes) 12,400,400 17,988,934
Balance (tonnes) 9,261,543 3,988,934

Based on market surveys , there are currently no company in Malaysia that produces
cumene. Based on studies , cumene global demand is expected to hit 17.9 million tonnes in the
year 2020 , where the global production capacity of cumene at that time is estimated to be
above 14 million tonnes per year. Since the raw materials for the production of cumene are
available locally and there is demand for cumene in Malaysia, cumene production plant is
feasible. The cumene production plant is expected to produce about 3.0% of the cumene
demand balance by the year 2020 which is about 120,000 tonnes per year.