Due to weak market demand and the continuous expansion of new production capacities, the global linear alkyl benzene (LAB) market has experienced a significant oversupply. Petrosa, the world's largest LAB supplier, warned that the commissioning of new LAB units in Saudi Arabia and Qatar in 2006 will push the global operating rate of LAB plants below 80%, a low level expected to persist for the next five years. LAB is a key aromatic hydrocarbon used primarily in the production of sulfonated linear alkyl benzene sulfonates (LAS), which serve as the main raw material for both household and industrial detergents. Traditionally, LAB was produced by alkylating C10–C14 alkanes or halogenated hydrocarbons with benzene using corrosive catalysts like HF or AlCl3. However, recent advancements have introduced more efficient methods, such as UOP’s ‘Detal’ technology, which uses solid acid catalysts and has now become the dominant production method. According to Colin A. New York, president of Houston & Associates, global LAB capacity reached 3.407 million tons in 2005, with Asia-Pacific accounting for 1.54 million tons, North America at 526,000 tons, Latin America at 348,000 tons, Western Europe at 348,000 tons, Eastern Europe at 50,000 tons, and the Middle East/Africa at 353,000 tons. In 2006, the Middle East and Africa are expected to see a sharp rise in capacity, reaching 523,000 tons annually. The expansion of new facilities is expected to worsen the oversupply situation, with current global operating rates hovering between 80% and 82%. In 2005, rising raw material costs led to a sharp increase in LAB prices. US contract prices for LAB in the fourth quarter reached $1,320–$1,540 per ton (DEL), while European prices rose to €1,030–€1,100 per ton, and Asian prices climbed to $1,175–$1,250 per ton. This price surge dampened consumer demand. Global LAB demand grew by only about 2% in 2005, reaching 2.487 million tons annually, with most regions in the Western Hemisphere seeing a decline of around 3%. Only Asia saw an increase in demand. Analysts predict that as long as oil prices remain high, LAB demand growth will stay around 2% per year. With oversupply and rising production costs, margins for LAB producers have plummeted, leading to industry restructuring and the closure of smaller facilities. Leading producer Sasol from South Africa recently announced the sale of its olefin and surfactant business, including LAB assets. Huntsman also noted that in this challenging environment, LAB producers will need to innovate. The company is considering upgrading its Chocolate Bayou, Texas facility to diversify its product range beyond traditional cleaning agents.

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