Refinery demand for processing catalysts will continue to flatten over the remainder of 2009 and into 2010 as the global recession winds out and energy prices remain soft. Operators, however, will continue to seek the greater efficiencies in energy use and productivity that processing catalysts permit. Requirements for cleaner fuels and pressures from suffer environmental regulations will continue to support catalyst use, even as product prices and demand sag over the remaining months of recession.

High-severity operations are benefiting from improvements in reforming catalysts, while process units are able to run longer before going into turnaround.

As refiners carry out the global move toward higher diesel production while reducing sulfur content, higher severity hydrotreating catalysts are helping to control costs and improve operational efficiencies, while petroleum-product markets begin to recover in 2010 and after.

Image from BASF Catalysts LLC

Revised outlook

Late last year, in its most recent published global overview of the worldwide catalyst market, Freedonia Group Inc., Cleveland, predicted overall catalyst demand among chemical, petroleum refining, and polymer companies would rise at 6%/year to $16.3 billion in 2012. Volume demand would grow at 2%/year to 5.3 million tonnes.

For refining catalyst trade, Freedonia forecast a growth of 5.9%/ year through 2017. Demand would reach more than $5.6 billion in 2012 and more than $7.6 billion in 2017.

Catalyst demand in petroleum refining, said the report, would be "quite strong due to healthy volume growth in hydroprocessing catalysts and higher refined product output" in Africa, the Mideast, and Asia-Pacific. Global efforts to reduce air pollution by lowering sulfur content in motor vehicle fuels will "boost catalyst loadings," as will the ongoing shift toward heavier grades of crude oil, and development of unconventional petroleum resources such as Canada's tar sands.

That was then, however - October 2008; this is now:

In response to questions from Oil & Gas Journal, Freedonia Group's Ned Zimmerman offered a qualifying assessment, based on events since midthirdquarter 2008.

With the advent and deepening of the global economic downturn in late 2008, he said, contraction in manufacturing in many parts of the world significantly lowered chemical, polymer, and refined- product volumes, which then directly affected worldwide catalyst demand. The drop in catalyst volumes depressed average prices as well, although a drop in commodity and platinum- group metal prices from their 2008 highs "helped ease the pain."

Freedonia Group, said Zimmerman, have lowered expectations for future world economic growth that informed the late 2008 report. Those expectations have contributed to prospects for slower growth in world oil consumption and world refined-products production.

In general, Freedonia Group now expects somewhat slower average annual global growth in refinery catalyst demand through 2012 in most regions, with the biggest difference occurring in North America due to the size of its market and reduced expectations of US oil consumption.

The situation in the US reflects not only slower forecast average annual economic growth but also shifting fuel efficiencies of the motor vehicle fleet, changing motorists' driving habits, and the potentially greater impact of biofuels on the US motor fuel needs.

Reduced North American refinedproduct consumption will also affect such other regions as the Middle East and Asia-Pacific, said Zimmerman. In both regions, countries have been building surplus refining capacity, at least some of which has been targeted toward North America.

On the whole, refining catalyst volumes by 2012 will likely increase from their 2007 base, although growth will be quite slow: This pace in turn would reduce value growth of the market as well. Growth in value terms is harder to project, he allowed, as averaging pricing tends to be much more volatile.

From the perspective of refining catalysts types, fluid catalytic cracking and alkylation catalysts will be the most severely affected by the slowdown in North America. Demand growth for hydroprocessing, reforming, and other catalysts will also be slower than previously expected but not nearly to the same degree.

Stricter environmental standards, particularly for reduced sulfur content in distillate fuels, will help support hydroprocessing catalyst demand, he said.