Chemical profile: propylene oxide

07 September 2009 00:00  [Source: ICB]

USES
The largest consumer of propylene oxide (PO) is polyether polyols used to make polyurethanes. The second-largest derivative is monopropylene glycol (MPG).

Other uses include propylene glycol ethers, flame retardants, synthetic lubricants, oilfield drilling chemicals, butanediol (BDO), propylene carbonate, allyl alcohol, isopropanolamines, modified starches and textile surfactants.

SUPPLY/DEMAND
Some producers say demand has improved since quarter two (Q2), mainly from the polyols sector. Q1 was very tough, with demand said to be down by 25% on 2008.

Supply, which was long in Q1, has tightened. PO output is being restricted by a shortage of propylene feedstock because of cracker shutdowns and a force majeure at Dutch producer Shell in Moerdijk, and much of what is available is being used in more lucrative derivatives.

Overall sales in 2008 were said to be down by 5%, compared with 2007 - mainly driven by a disastrous Q4, when some plants were idled. Netherlands-based LyondellBasell and Germany's Bayer restarted their joint-venture (JV) plant at Maasvlakte, Netherlands, in Q2. In June, Spain's Repsol announced it would idle its Puertollano plant for three months.

New capacity went on line in the first half of 2009. Germany's BASF and US-based Dow Chemical started up their 300,000 tonne/year JV plant in Antwerp, Belgium, based on new hydrogen peroxide technology. Petro Rabigh started up a 200,000 tonne/year plant in its home country, Saudi Arabia, with the majority of output targeted for the Chinese market.

PRICES
European prices in the miscellaneous sector started to turn up in May, and were in the range €1,180-1,267 ($1,690-1,815)/tonne in August. Prices look set to rise again in September, pushed up by the €93/tonne hike in propylene feedstock costs.

Producers say margins are at historical lows, and it is difficult to increase derivatives prices because of weak demand.

TECHNOLOGY
The traditional route is either by chlorohydrin or epoxidation. A popular epoxidation process has been the propylene oxide/styrene monomer (PO/SM) route, and several plants have been built. But it has the disadvantage of producing 2.25 tonnes of SM for every tonne of PO. An alternative epoxidation route uses isobutene ,which makes a tert-butyl alcohol coproduct that can convert to methyl tertiary butyl ether (MTBE).

New PO-only processes have been developed: cumene-hydroperoxide-based propylene oxidation with cumene recapture; direct propylene hydro-oxidation with oxygen and hydrogen; direct propylene oxidation with oxygen technology; and propylene oxidation using hydrogen peroxide (HPPO).

OUTLOOK
The European market has traditionally grown at an annual 3-4%, and one source says it will be 2011 before Europe returns to pre-crisis levels.

Asia, and particularly China, is the world's strongest growth market, with demand before the crisis running at 7-8%/year.

No more investment is proposed in Europe. Projects are planned in China, Taiwan, South Korea, Thailand and Saudi Arabia.

Dow Chemical and Siam Cement in Thailand are building a 390,000 tonne/year plant in Mab Ta Phut using HPPO technology, with completion expected in 2011. Dow said that it is also considering a plant in the Middle East, but this was an option for the longer term.

LyondellBasell has formed a JV in China with state energy major Sinopec to build a 285,000 tonne/year at Ningbo.

BASF said that an HPPO plant in the US remains an option.

Get an entire year's worth of chemical profiles
The chemical profiles published in ICIS Chemical Business during 2008 are available on USB stick. For more details or to order, email: sarah.creswell@icis.com

EUROPEAN PROPYLENE OXIDE CAPACITY, '000 TONNES/YEAR

Company Location Capacity
BASF Ludwigshafen, Germany* 125
BASF/DOW Antwerp, Belgium 300
Dow Chemical Stade, Germany 590
Ellba Moerdijk, the Netherlands 250
INEOS Olefins Cologne, Germany 210
Lyondell Bayer Maasvlakte, the Netherlands 305
LyondellBasell Botlek, the Netherlands 250
Fos, France 220
Nizhnekamskneftekhim Nizhnekamsk, Russia 50
Novacke Chemicke Zavody Novaky, Slovakia 10.5
Oltchim Rimnicu Vilcea, ­Romania 17
PCC Rokita Brzeg Dolny, Poland 25
Repsol YPF Puertollano, Spain** 70
Tarragona, Spain 200
Shell Moerdijk, the ­Netherlands 210
* includes butylene oxide
** idled temporarily
 Source: ICIS plants & projects

Profile last published September 18, 2006

For the latest market prices and reports on more than 120 commodity chemicals from the leading independent pricing and market intelligence service, please visit ICIS pricing


By: Elaine Burridge
+44 20 8652 3214



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly