07 September 2009 00:00 [Source: ICB]
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.
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.
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.
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).
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.
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EUROPEAN PROPYLENE OXIDE CAPACITY, '000 TONNES/YEAR
|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|
|Novacke Chemicke Zavody||Novaky, Slovakia||10.5|
|Oltchim||Rimnicu Vilcea, Romania||17|
|PCC Rokita||Brzeg Dolny, Poland||25|
|Repsol YPF||Puertollano, Spain**||70|
|Shell||Moerdijk, the Netherlands||210|
|* includes butylene oxide|
|** idled temporarily|
|Source: ICIS plants & projects|
Profile last published September 18, 2006
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