Propylene oxide

21 May 2001 00:00  [Source: ICB]

Marginal extra capacity versus consumption is forecast until 2005

Updated from product profile, ECN 2 August 1999


The main consumer is polyether polyols (about 65%), followed by propylene glycol (21%) and propylene glycol ethers (4%). Polyether polyols are used with MDI or TDI to make polyurethanes, while propylene glycol finds a major outlet in unsaturated polyester resins. Other uses (10%) include flame retardants, synthetic lubricants, oilfield drilling chemicals, butanediol, propylene carbonate, allyl alcohol, isopropanolamines, modified starches and textile surfactants.


West European demand grew by 5-6% in 2000, reaching 1.48m tonne, with production at 1.56m tonne, according to Tecnon Orbichem. Consumption and production are expected to reach 1.54m tonne and 1.67m tonne respectively in 2001. Tecnon said demand worldwide was just under 4.4m tonne in 2000 and operating rates were about 95%. The global market is currently balanced, although European stocks are high in preparation for a heavy maintenance schedule in May/June. Polyurethanes consumption was good early in the year, but has now slowed, although glycols demand remains strong. Several producers have carried out small expansions in the last two years. Dow will lift capacity by 15 000 tonne/year during a turnaround in June. Restructuring downstream includes EniChem's sale of its polyurethanes business to Dow, Bayer's purchase of Lyondell's polyols assets and their 50:50 joint venture in a new POSM plant. BP has bought the remaining 50% stake in Erdölchemie.


Prices have stayed unchanged this year for most small, miscellaneous customers and are quoted between DM2260-2450/tonne FD. However, large accounts, which are based on a formula linked to propylene, have seen prices fall in quarter two to reflect the lower propylene contract price. Players said margins remain unsatisfactory, albeit slightly improved from last year's disastrous levels caused by the huge increases in propylene which they were unable to pass on.


PO can be made by chlorohydrin or hydroperoxide routes. In the older chlorohydrin process, propylene and chlorine react in the presence of water to form propylene chlorohydrin which is reacted further with sodium or calcium hydroxide. In the popular POSM route, ethylbenzene is first reacted with oxygen to make ethylbenzene hydroperoxide and then with propylene. Phenylmethylcarbinol coproduct is dehydrated to styrene. This route, which yields between 2.25-2.4 units of styrene for every unit of PO, is used by Lyondell, Shell, Ellba and Repsol. An alternative hydroperoxide route uses isobutane which makes a tert-butyl alcohol coproduct that can be converted to MTBE. Dow has bought POSM technology from Russia's Nizhnekamskneftekhim which it intended to use in a plant on the US Gulf Coast. However, Dow has delayed the project although it plans to use the process in a 250 000 tonne/year unit in Tianjin, China. Sumitomo has developed a co-product-free process and will use it in a new 200 000 tonne/year plant at its Nihon Oxirane joint venture for startup in 2002. Degussa/Krupp Uhde, BASF and China's Dalian Institute of Chemical Physics have developed hydrogen peroxide routes. BASF started up a pilot plant in Ludwigshafen last year and will assess results by end 2001.

Health and safety

PO is a very volatile, colourless, liquid. It is highly flammable and reactive and is a dangerous fire or explosion hazard. Inhalation can irritate the nose, throat and lungs and cause depression of the central nervous systems. Swallowing can cause severe burns and it can be absorbed through the skin with possible systemic effects.


European growth is expected to slow to about 4% this year. Tecon is predicting global operating rates to slip to 92-93% by 2003 as new capacity comes onstream. In Europe, Lyondell/Bayer will complete a 285000 tonne/year unit in Rotterdam in 2003 and Rokita is planning to double capacity. Asian demand growth is closer to 10%/year and several projects are planned. Ellba Eastern's 250 000 tonne/year plant in Singapore is due up in second half 2002, Shell's Nanhai, China, complex, due onstream late 2005, includes a 250000 tonne/year unit, and Lyondell is also considering a new plant, possibly in China.



Company Location Capacity

Western Europe

BASF Ludwigshafen, Germany 124*
Dow Chemical Stade, Germany 510**
Ellba Moerdijk, Netherlands 250
EniChem Priolo, Italy 110
Erdölchemie Cologne, Germany 200
Lyondell Fos-sur-Mer, France 220
Rotterdam, Netherlands 245
Repsol Puertollano, Spain 70
Tarragona, Spain 150
Shell Moerdijk, Netherlands 200

Eastern Europe

Nizhnekamsk,Tartarstan 50
Oltchim Rimnicu Vilcea, Romania 17
Polihem Tuzla, Bosnia 22
ZC Rokita Brezg Dolny, Poland 25


Dow Chemical Freeport, Texas, US 644
Louisiana, US 276
Aratu, Brazil 200
Huntsman Port Neches, Texas, US 230
Lyondell Bayport, Texas, US 598
Channelview, Texas, US 552

Far East

Asahi Glass Kashima, Japan 100
Nihon Oxirane Chiba, Japan 170
SK Evertec Ulsan, South Korea 140


Chemicals Pulau Seraya, Singapore 140

*also includes butylene oxide **525 000 from mid-June 2001Source: ECN/CNI

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