World propylene to stay tight despite new capacity - consultant

24 March 2010 23:15  [Source: ICIS news]

HOUSTON (ICIS news)--Global propylene availability is expected to remain restricted despite some 13m-14m tonne/year of new capacity coming on stream in 2009 and 2010, a consultant said on Wednesday.

Co-product production from steam crackers and refinery operations is limiting the supply of the propylene molecules, said Mike Smith, vice president of propylene, DeWitt . He was speaking at his company's 35^th World Petrochemical Conference.

A loss of ethylene demand and more ethane cracking in the US has resulted in a drop of propylene supplies from steam crackers.

Supplies from refinery gasoline operations are being limited due to increased use of biofuels and rising fuel efficiency standards, Smith said.

In the US, there will be a boost in supply when Petrologistics starts up its new propane dehydrogenation (PDH) unit in Houston this summer. With a capacity of 540,000 tonnes/year, this plant adds 3.5% to supplies in the US. However, Smith expects this incremental volume to be quickly used up.

Much of the new propylene capacity is associated with new polypropylene (PP) plants, he said. In many cases, propylene cannot be exported from these plants, so if the PP plant is underutilised, so is the propylene unit.

Although PP is expected to see strong growth, Smith said that there is an abundance of PP capacity that will hold operating rates in the low 80s%.

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By: Peter Taffe
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