Updated to mid-August 2009
Asian market review by Hong Chou Hui, ICIS pricing
Asian propylene oxide (PO) prices had gained more than 28% of its value since mid-May on feedstock propylene cost pressure, despite languid demand from the downstream mono propylene glycol (MPG) sector. Propylene prices had surged more than 37% within the same period.
Reduced operating rates at regional propylene oxide/styrene monomer (POSM) and hydrogen peroxide PO facilities coupled with a declining Chinese import volumes ensured tightness in supplies through the quarter. By mid-August, PO values had reached yuan (CNY)11,900-12,300/tonne DEL (delivered) China.
European market review by Alexander Nimmo, ICIS pricing
European PO contract prices followed an upward trend from around €1,110/tonne FD (free delivered) NWE (northwest Europe) in May to around €1,260/tonne FD NWE due to rising costs of feedstock.
In general PO demand was described as weak over the summer. Unplanned shutdowns upstream in the propylene sector meant that material was tight, and furthermore the PO market is not as lucrative as other propylene based compounds. This meant that the market remained tight well into August.
After the propylene settlement was finally agreed at plus €35/tonne, PO prices rose by €28/tonne to settle at €1,180-1,267/tonne for August. In terms of supply there were no major factors besides propylene supply.
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Propylene oxide
Uses and Outlook
Propylene oxide (PO) is a highly reactive chemical used as an intermediate for the production of numerous commercial materials. The largest derivative of PO is polyether polyols, taking about 60-70% of PO demand. Polyether polyols are one of the main components used in the manufacture of polyurethanes (PUs), which are used in applications such as rigid foam installation and flexible foam seat cushions. World demand for polyols is growing about 5%/year.
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Propylene oxide
Process Technologies
Propylene oxide (PO) is made traditionally by chlorohydrin or epoxidation routes. In the older chlorohydrin process, propylene and chlorine react in the presence of water to form propylene chlorohydrin, which is further reacted with sodium or calcium hydroxide to obtain PO.
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