18 September 2006 00:00 [Source: ICB]
Propylene oxide's (PO) main consumer is polyether polyols (60%), followed by propylene glycol (21%). Other uses include propylene glycol ethers, flame retardants, synthetic lubricants, oilfield drilling chemicals, butanediol, propylene carbonate, allyl alcohol, isopropanolamines, modified starches and textile surfactants.
European producers report strong demand this year and are expecting to see an overall growth of 3-3.5% for 2006, similar to that in 2005. Supply is said to be tight. Propylene availability is also short, due to production upsets, and players say there could be supply issues on propylene/PO in the fourth quarter.
New capacity online this year includes CNOOC/Shell in China, and expansions of 50,000 tonnes/year for both Sumitomo and Repsol, in Japan and Spain, respectively.
European prices in the miscellaneous sector lifted slightly mid-year and have remained stable at €1,380-1,450/tonne, FD (free delivered ) NWE (northwest Europe). Margins are said to be average, and have been steady since 2005.
In China, spot deals have traded between 14,900-15,400 yuan/tonne, and Japanese and Korean producers are seeking hikes to reflect higher naphtha costs.
The traditional route is either by chlorohydrin or epoxidation. A popular epoxidation process has been the propylene oxide/styrene monomer (PO/SM) route, which produces 2.25 tonnes of styrene for every tonne of PO. An alternative epoxidation route uses isobutene, which makes a tert-butyl alcohol co-product that can be converted to methyl tert-butyl ether (MTBE).
New technologies without co-products are nearing commercialisation. Most attention has been focused on converting propylene directly to PO using a suitable catalyst and oxygen. Sumitomo has developed a cumene-to-PO process, and Lyondell has developed a one-step oxidation route. Dow Chemical/BASF and Degussa/Uhde have developed hydrogen peroxide to PO (HPPO) routes and the first plants are due on stream in 2008.
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 tract and ingestion can cause severe burns. It is classed as a probable human carcinogen
Global demand growth is forecast at about 6%/year, with the biggest growth in China and India. European demand is tipped to rise at around 3.5%/year. Sources say that world markets have come more into balance and, with no new capacity due next year, supply will remain snug.
In 2008, new HPPO plants will start up for Dow/BASF in Antwerp, Belgium, and SKC in South Korea. Dow/BASF plan further HPPO plants in Asia and the US for 2009/2010. Lyondell is in talks for a project in China, and several other projects are planned in the country for 2008-2010. Sumitomo's joint venture in Saudi Arabia, PetroRabigh, is building a complex including 250,000 tonnes/year of PO for start-up in late 2008.
|Asahi Glass||Kashima, Japan||110|
|CNOOC/Shell Petrochemicals||Huizhou, China||250|
|Dow Chemical||Aratu, Brazil||250|
|Freeport, Texas, US||725|
|Plaquemine, Louisiana, US||330|
|Ellba Eastern||Seraya, Singapore||250|
|Huntsman||Port Neches, Texas, US||240|
|INEOS Olefins||Cologne, Germany||210|
|Jin Hua Chemical||Huludao, China||130|
|Lyondell Bayer||Maasvlakte, Netherlands||285|
|Lyondell Chemical||Bayport, Texas, US||600|
|Channelview, Texas, US||550|
|Nihon Oxirane||Sodegaura, Japan||180|
|Repsol YPF||Puertollano, Spain||70|
|Seraya Chemicals||Seraya, Singapore||160|
|Shanghai Gaoqiao Petrochemical||Pudong, China||80|
|Shell Chemicals||Moerdijk, Netherlands||210|
|SKC Chemicals||Ulsan, South Korea||170|
|Sumitomo Chemical||Ichihara, Japan||200|
|Tianjin Dagu Chemicals||Tianjin, China||100|
* plants over 70,000 tonnes/year only** includes butylene oxideSource: ICIS
Profile last published 17 May 2004
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