EPCA ’04: PG seen to be tight globally through 2006

26 September 2004 17:47  [Source: ICIS news]

MONTE CARLO, Monaco (CNI)--Propylene glycol (PG) in North America and worldwide likely will remain very tight through 2005 or 2006, a major North American PG market source said here Sunday, citing both strong continuing PG demand growth and equally tight supplies for PG precursor propylene oxide (PO).

 

“Demand for PG in the North American market has been increasing month on month for the past year,” the industry source said.  “There is definitely more PG business than a year ago, substantially more,” he added.

 

So too, said the executive, has demand for PO grown over the past year, putting pressure on PG pricing from the upside. The tight PO market is in turn driven by a tight market for propylene. “Propylene demand is high,” the PG market player noted, “and that means fewer molecules for PO.”

 

PG prices are up by as much as 30-35% from a year ago, the source said.

 

“If China continues to consume as it has been, there just isn’t enough PO capacity,” the source said. “Just to keep up with current demand growth worldwide, we’d need one new worldscale PO plant each year – but there is no new PO capacity planned until 2006 or later.”  He cited Shell’s planned PO unit in China, due onstream in 2006, and the Dow-BASF joint venture PO facility planned to come onstream in Belgium in 2008.  A worldscale PO plant would be in the 300 000 tonne/year capacity range.

 

The PG industry executive spoke with CNI on the sidelines of the 38th annual meeting here of the European Petrochemical Association (EPCA). The conference runs through Tuesday (29 September).

 

CNI EPCA newsroom: Suite Naiades C, Grand Hotel; Tel. + 377-9315-1070/71

By: Joe Kamalick
+1 713 525 2653

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