Russian Steel Asks Ministry Not to Restrict Coal Benzene Exports

The Russian ferrous metallurgy association Russian Steel has asked the Ministry of Industry and Trade not to restrict exports of coal-derived benzene from Russia. Kommersant, which has obtained a copy of the letter, reports that the document was addressed among others to Deputy Minister Roman Chekushov; the newspaper said it had sent questions to the ministry.

The appeal was prompted by discussions on introducing a ban on the export of certain petrochemical goods, a measure intended to cover the increased needs of benzene consumers, according to the text of the letter cited by Kommersant.

By-product economics at coke-chemical plants

Crude benzene is a by-product of coke production at coke-chemical plants, Russian Steel explains in the letter. Pure benzene is then synthesised from it and supplied to other industries. Historically, Russian output of coal-derived crude benzene has exceeded domestic demand, and exports gave coke-chemical plants a way to place the surplus. Because the material appears alongside coke rather than being made to order, its volume follows the coke schedule rather than the benzene market.

A week of storage, and drone risk

Stockpiling is not a workable alternative, the association argues. Metallurgical enterprises provide for benzene storage of on average no more than a week because of its high explosion hazard. For the same reason, the letter states, a longer gap between shipments to consumers is not acceptable, and neither is a build-up of stocks under current conditions of elevated terrorist risk, including attacks by unmanned aerial vehicles.

• Coal-derived crude benzene arises as a by-product of coke-making and cannot be scaled to demand independently of coke output.
• Average on-site storage at metallurgical plants is no more than a week.
• Domestic production has historically exceeded domestic demand, with exports absorbing the balance.

Gasoline blending behind the squeeze

The government commission on economic development and integration has been discussing a possible ban on exports of aromatic hydrocarbons, including benzene, sources told Kommersant. Those compounds are increasingly used as a component in gasoline production, which has created a feedstock shortage for petrochemicals and pushed prices up. The restriction under discussion is meant to increase the availability of aromatics for domestic petrochemical producers.

Russian Steel says it is working with companies on a possible reorientation of part of the export volumes in order to provide additional loading for the coke-chemical plants of Evraz, which has capacity to process crude benzene into purified benzene. That route would keep material inside the country without leaving coke producers with volumes they cannot place.

Downstream effects: phenol, resins and coatings

The feedstock shortage has already reached the production of industrial resins for woodworking, Kommersant reports. Phenol, obtained from benzene and propylene, is used in that chain, and the shortfall has driven prices to record levels. Competition for feedstock is not limited to gasoline production: orthoxylene and toluene are also used as solvents in the paint and coatings industry, so redistributing their supply affects several consuming sectors at once.