12 July 2004 00:01 [Source: ICB]
The major outlet for propylene glycol (PG) is the production of unsaturated polyester resins (UPR), which are used in surface coatings and glass fibre reinforced resins. The second largest consumer is antifreeze where it is replacing ethylene glycol (EG) in de-icing aircraft and as a coolant in the food industry.
Large quantities are used in the manufacture of plasticisers and hydraulic brake fluids. It is also used in non-ionic detergents and as a humectant in the pharmaceutical, cosmetics, animal foodstuffs and tobacco industries. It is an excellent solvent and an extractant.
PG production is driven by propylene oxide (PO) availability. Extra PG can be produced to balance PO. The PG market is currently well balanced to tight due to various production problems in Spain and scheduled outages in France and Germany.
Players say that demand in Europe is relatively healthy and in line with expectations. Consumption into the UPR sector is still quite sluggish, but demand into applications such as cosmetics, pharmaceuticals and specialities is better. Overall, the market in western Europe was up by 6% last year on 2002, but exports were down because of the weak dollar. Exports are still ‘a nightmare’, according to one producer, and are done on an exceptional basis only where sufficient netback is gained.
Dow Chemical has lifted capacity at Stade, Germany, by 20% this year through debottlenecking and efficiency improvements. Its plant in Priolo, Italy, which was idled in January 2003, is being closed permanently.
Current European prices are reported in the range €880-915/tonne FD NWE for technical/industrial grade, although numbers are heard on either side of this. Players say margins have now disappeared after propylene contracts for quarter three settled up by €60/tonne to €585/tonne.
Margins improved in the second half of last year, but have been eroded in the first half of 2004. Propylene costs increased by €50/tonne in both quarters one and two and PG players say these increases have still not been recovered.
PG producers are targeting raising prices to €970-1000/tonne in July and will probably go for a further increase in September. Sources say that producers would prefer to cut back output and reduce their losses if prices do not rise to a more acceptable level.
Commercial production of PG is by the hydration of PO. Di- and tripropylene glycols, as well as small quantities of higher glycols, are also produced in the reaction. The reaction between PO and water takes place at 200°C and 1200 bar pressure. To limit the quantity of higher alochols formed, the amount of water is controlled to favour the production of PG. The reaction mixture is dehydrated by evaporation and the various glycols are separated by distillation.
Work at Michigan State University has shown that carbohydrates can be readily hydrogenated to PG in 86% selectivity at 98% conversion.
PG is a colourless, slightly viscous liquid with little odour. It is not corrosive and is combustible, but not flammable, at room temperature. The liquid can irritate the eyes.
Future demand growth in Europe is forecast at GDP rates. Asia is the fastest growing market and consumption here is predicted to grow between 6-10%/year.
No new plants are planned in Europe although new capacity will be needed in the next few years, said a source. All investment projects are targeted for the Asian market and China in particular.
Construction is now under way on Shell Chemicals and China National Offshore Oil’s joint project in Huizhou, China. The complex includes a 60 000 PG plant and completion is scheduled by the end of 2005, with startup slated for early 2006.
The only other major project is by Nihon Oxirane, the Sumitomo Chemical/Lyondell partnership which is planning a 90 000 tonne/year plant in Chiba, Japan. Completion is expected at the end of 2004, with commercial production expected in March 2005.
|Arch Chemicals||Brandenburg, Kentucky||35|
|Dow Chemical||Altona, Australia||15|
|Freeport, Texas, US||159|
|Plaquemine, Louisiana, US||136|
|Huntsman||Port Neches, Texas, US||58|
|Jin Hua Chemical||Huludao, China||20|
|Lyondell||Bayport, Texas, US||238|
|Manali Petrochemical||Chennai, India||15|
|Novacke Chemicke Zavody||Novaky, Slovakia||2|
|Oltchim||Rimnicu Vilcea, Romania||9|
|Repsol YPF||Puertollano, Spain||22|
|Seraya Chemicals||Pulau Seraya, Singapore||65|
|SKC Chemical||Ulsan, South Korea||50|
|ZC Rokita||Brzeg Dolny, Poland||4|
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