After the decline in demand in 2020 and 2021, the world’s refining catalysts are expected to return to the level before the COVID-19. According to the “Catalyst, Petroleum, and Chemical Process Report” recently released by the S&P Global Specialty Chemicals Update Program (SCUP), due to a decrease in consumption in all regions except China, Southeast Asia, and India, the global refining catalyst market value decreased in 2021, but demand for refining catalysts will recover in 2023.
Rajesh Gatupali, vice president and general manager of Honeywell LST refining, said that the demand for refining catalysts declined from 2020 to 2021 due to the COVID-19 and the slowdown of economic growth. In 2022, the world refining catalyst market rebounded and is expected to return to pre pandemic levels by 2023. In addition, Raphael Crawford, President of Ketjen Company, a newly established subsidiary of Yabao, stated that the geopolitical and macroeconomic trends in 2022 have had different impacts on each region. The product markets of refineries in Europe and Asia have become imbalanced, and their crude oil choices have also changed, while refineries in the United States have higher utilization rates. All these changes require the re optimization of refining operations, and the key is still the catalyst.
Chris Jeziyak, Sales and Project Manager at Catalyst Group (TCG) in the United States, stated that China may experience a significant increase in fuel demand in 2023. Air travel is still far below pre pandemic levels, which has affected the demand for jet fuel. Due to the stickiness of ‘working from home’ still existing, workers are no longer commuting as much as before, and their potential medium to long term trend is to undermine demand for gasoline. TCG CEO John Murphy stated that the demand for catalytic cracking and hydrotreating catalysts is not significantly affected by the epidemic and is strong, and the demand for hydrotreating catalysts is accelerating. Especially, technologies such as hydrofining and hydrocracking can provide more value-added light oil conversion in refineries. Murphy said that due to geopolitical issues such as the Russia-Ukraine conflict, supply chain security has become very important. He also predicted that by the end of 2023, the catalyst market demand would return to the level before COVID-19, but he also said that due to the geopolitical situation, the situation would not be the same as usual.
Murphy added that in the short term, more advanced refineries or those with other resources are reducing refining capacity to avoid overcapacity. So, if they can maintain capacity utilization rates at 85% to 94%, they will be able to avoid overcapacity. This is due to the expected shrinking transportation fuel market, and future restrictions or regulations on refined products will become more challenging, “Murphy said.
In the medium term, refining catalysts are an expanding business. However, in recent years, the market has become more mature in both developed and developing countries, and growth is expected to be minimal in the next five years. Gatupali stated that several factors are expected to drive the mid-term growth of the refining catalyst market, including the recent increase in middle distillate production by refineries, increased demand for clean fuels in developing countries, and a rebound in the tourism industry after the pandemic.
Scott Punell, interim president of the refining technology department of Grace Company, stated that the company will continue to develop market opportunities in catalytic cracking catalysts (FCC), residue upgrading and renewable raw material processing catalysts, as well as advanced refining technology (ART) hydrotreating business. In FCC catalysts, customers continue to seek to reduce low value slurry yield and minimize coking. In ART, key markets include the licensing and operation of residual oil desulfurization (RDS) units and fluidized bed hydrocracking units. He added that sustainability, carbon footprint, and energy efficiency are affecting the overall value formula of refiners. Punell stated that renewable raw materials have started to be used by many customers, and in the FCC process, some refiners have started to process various bio based and unconventional materials together with traditional vacuum gas oil to reduce their carbon footprint. In addition, the global growth rate of polypropylene continues to drive the demand for FCC catalysts that maximize the production of propylene, while the octane number component requirements also drive the growth of catalysts that meet the high butene yield of downstream alkylation.
The S&P Global Report states that global environmental regulations require the production of cleaner fuels. Therefore, refineries are facing enormous pressure from the market, which requires a change in product mix, as well as quality requirements. An important long-term trend in the future is the use of biomass as raw materials to reduce carbon dioxide emissions and advance sustainable development goals. Murphy stated that catalyst suppliers will study catalyst regeneration and reactivation more carefully to maintain profitability and address issues such as decarbonization and recyclability.
Crawford stated that catalyst suppliers need to strengthen cooperation with customers, grasp and control changes in real-time, and support the transition of refineries to renewable and recycled raw materials and products through innovation. In addition to innovation, new chemical theories and partnerships are also needed to develop technically and economically reasonable solutions.