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Naphthalene is derived from two sources—coal tar and petroleum. In 2005,
over 90% of U.S. naphthalene was produced from coal tar; most naphthalene in
Western Europe was produced from coal tar and all naphthalene produced in Japan
was from coal tar.
The production value of naphthalene for these three regions amounted to about
$250–300 million in 2005. Major players included Koppers and Recochem
in North America, Rütgers AG and Koppers in Western Europe, and C-Chem
Co. and JFE Chemical Corporation in Japan.
The major outlet for naphthalene is the production of phthalic anhydride,
particularly in Japan and the United States, where it accounted for 74% and
62% of naphthalene demand, respectively, in 2005. Phthalic anhydride is also
produced from ortho-xylene, which is available in large quantities. The naphthalene
sulfonate market is a significant outlet for naphthalene and is currently the
only naphthalene market showing growth in all major regions.
The following graph provides a breakdown of naphthalene consumption in the
United States, Western Europe and Japan:

In the United States, naphthalene consumption for phthalic anhydride production
accounts for almost two-thirds of total consumption. Currently, only about
10% of phthalic anhydride production is naphthalene-derived; most is based
on o-xylene. Naphthalene’s market share may decline if phthalic anhydride
producers rely more on o-xylene as a feedstock in the future.
Demand for naphthalene for phthalic anhydride production has disappeared in
Western Europe. Naphthalene sulfonates and alkylnaphthalene solvents accounted
for 52% and 17%, respectively, of Western European naphthalene demand in 2005.
Japanese phthalic anhydride production accounted for 72% of domestic consumption
in 2005. Phthalic anhydride plays a more dominant role in naphthalene demand
in Japan than in the United States or Western Europe. Domestic naphthalene
demand for phthalic anhydride is expected to decrease by 6.1% per year during
2005–2010.
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