Dow Ups DPG Prices in North America

14 October 2002 00:00  [Source: ICB Americas]

Limited availability and healthy demand have prompted Dow Chemical Company to launch a 3 cent increase for all dipropylene glycol (DPG) products. High feedstock costs, mainly for propylene, have also contributed to the increase.

Despite a weak economy, demand for dipropylene glycol products has held up well, especially next to its co-product mono-propylene glycol (PG), according to Dave Pashalidis, business director of PO/PG for Dow. Since PG is produced at roughly 10 times the amount of DPG, there is currently higher demand for DPG than the production rate of PG is capable of supporting. "Therefore, in North America, dipropylene glycol has become snug," says Mr. Pashalidis.

Further compounding the tight supply situation is a turnaround at Dow's Freeport, Tex., propylene oxide (PO) facility. PO is the main feedstock for all propylene glycols. Dow has launched a maintenance turnaround at the 1.5 billion pound plant that is scheduled to last through October. "Because of the length of the shutdown, we will not be able to run our glycol plant through that length of time," notes Mr. Pashalidis. "We will run the glycol plant off of the inventory we have, but we do not store much PO. We will have a diminished availability of all glycols out of Freeport over the next two months. We are going to get tight on glycols period," he adds.

Compounding Dow's supply situation has been unruly weather on the Gulf Coast. Dow was forced to shut down its Plaquemine, La., PO facility for Hurri-cane Isidore and then had to close both facilities in advance of Hurricane Lili. "We are going to be really tight in October and November and it has been aggravated by adverse weather."

Weather may also play a factor in the future. A leading end use for PG is as an aircraft deicing fluid. If the coming winter is harsh, with lots of snow, then PG production will be running full out, and there will be more DPG as well. "If we have a strong season, we will be running PG as hard as we can trying to maximize production to make enough aircraft deicing fluid, which means you will get more dipropylene glycol out of those months, which should relieve some of the pressure on dipropylene glycol supply," says Mr. Pashalidis. However, early forecasts are calling for a mild winter in much of the country, which would mean less demand for PG and less production of DPG.

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