17 May 2004 00:01 [Source: ICB]
Propylene oxide’s (PO) main consumer is polyether polyols which takes about 60% of output, followed by propylene glycol (PG) with 21%. Other uses include the production of propylene glycol ethers, flame retardants, synthetic lubricants, oilfield drilling chemicals, butanediol, propylene carbonate, allyl alcohol, isopropanolamines, modified starches and textile surfactants.
Demand in Europe is said to be stable with availability tight to balanced. Propylene feedstock has been short, forcing some PO producers to make spot purchases at prices well above contract levels, making PO production costs unsustainable. However, propylene availability is easing slightly now.
Industry figures show that the west European market grew by 5% in 2003, although some players believe growth to be a more moderate 2-3%. East European growth, particularly for polyols, is higher, albeit from a small base.
European merchant PO prices have gained an average €30-40/tonne in quarter two and the pre-discounted range is quoted at €1160-1220/tonne. However, margins are still being squeezed by the steep rise in propylene feedstock costs, with contract prices seeing a €50/tonne increase in both quarter one and two, as well as soaring spot values.
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 PO/styrene monomer (POSM) route, ethylbenzene is reacted with oxygen to make ethylbenzene hydroperoxide and then with propylene to form PO. Phenylethylcarbinol coproduct is dehydrated to styrene.
New technologies without coproducts are nearing commercialisation and most efforts have focused on converting propylene directly to PO using a suitable catalyst and a source of oxygen.
Sumitomo has built a 200 000 tonne/year plant in Japan using its cumene to PO technology and has transferred the plant to Nihon Oxirane, its joint venture with Lyondell. Lyondell, which has access to Sumitomo’s process, has also commissioned a pilot plant in Pennsylvania, US, for its new one-step oxidation route.
Other companies are researching a hydrogen peroxide to PO (HPPO) route. Degussa and Uhde have a first licence with Sasol to build a 60 000 tonne/year plant in South Africa, which could start up by late 2006. Dow and BASF have combined research efforts and are evaluating options for a 300 000 tonne/year HPPO plant, which could start up by 2007.
PO is a clear, colourless liquid with an ether-like odour. It is very volatile and highly flammable and is a dangerous fire and explosion hazard. Inhalation can irritate the respiratory track and ingestion can cause severe burns. It is classed as a probable human carcinogen.
Future demand growth is put at about 4-5%/year for Europe, and at 6-8%/year for Asia, with China much higher at 10%/year or more. World overcapacity is estimated at 10-15%, but players say a new worldscale plant is needed about every two years to meet demand growth, particularly in Asia. Shell is building a 250 000 tonne/year unit in Huizhou, China, for 2006 and Bayer has plans for a new plant in Caojing, China, by 2008.
Sources believe new capacity will also be needed in Europe and the US by the end of the decade, but margins need to improve to stimulate further investment.
Global propylene oxide capacity, ’000 tonne/year
|Dow Chemical||Stade, Germany||550|
|Oltchim||Rimnicu Vilcea, Romania||17|
|Repsol YPF||Puertollano, Spain||70|
|ZC Rokita||Brezg Dolny, Poland||25|
|Dow Chemical||Aratu, Brazil||250|
|Freeport, Texas, US||690|
|Plaquemine, Louisiana, US||320|
|Huntsman||Port Neches, Texas, US||240|
|Lyondell||Bayport, Texas, US||600|
|Channelview, Texas, US||550|
|Asahi Glass||Kashima, Japan||110|
|Baling Petrochemical||Yueyang, China||4|
|Ellba Eastern||Pulau Seraya, Singapore||250|
|Jin Hua Chemical||Huludao, China||120|
|Jinling Petrochemical||Nanjing, China||35|
|Manali Petrochemical||Chennai, India||27|
|Nihon Oxirane||Chiba, Japan||180|
|Seraya Chemicals||Pulau Seraya, Singapore||175|
|Shandong Befar Group||Binzhou, China||65|
|Shandong Dongda Chemical||Zibo, China||40|
|Shanghai Gaoqiao||Pudong, China||80|
|SKC Chemical||Ulsan, South Korea||170|
|Southeast Electro-Chemical Co||Fuzhou, China||50|
|Sumitomo Chemical||Ichihara, Japan||200|
|Tianjin Dagu||Tianjin, China||100|
|Zhejiang Pacific||Ningbo, China||20|
|* includes butylene oxide ** Bayer takes 50% of output|
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