ICIS publishes our reliable and trustworthy propylene oxide report in Asia, Europe and the US on a weekly basis. Independent and unbiased pricing assessments are quoted for spot and contract, depending on the region. Our locally-based reporters gather market intelligence to compile commentary to include insight into demand and supply movements, upstream and downstream trends, trade and production data and any other key influencing factors that may impact prices in the market at the time.
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Propylene Oxide Overview Transcript
Propylene oxide or PO is a highly reactive liquid and is an important intermediate in the production of polyether polyols and monopropylene glycol MPG.
PO is produced via three main technologies in Asia: chlorohydrin, POSM or styrene monomer and HPPO or hydrogen peroxide to PO processes.
The Asian market has both spot and contract prices, Japan contract prices take a steer from naphtha contract prices, whereas the South Korea contract and the China spot prices are dependent on a key feedstock: propylene.
Japan contract prices take a steer from naphtha contract prices, whereas the South Korea contract and the China spot prices are dependent on a key feedstock: propylene.
Other raw materials such as chlorine and hydrogen peroxide, are also price-determining factors, dependent upon technology used.
In China, which is both the largest producer and consumer in the world, most PO units use chlorohydrin technology. So fluctuations in the local chlorine prices have a significant impact on Chinese PO prices.
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Upstream of Propylene oxide
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Propylene oxide: Market overview
Updated to Q3 2016
European propylene oxide (PO) contract price developments will largely depend on upstream propylene contract price evolution as the majority of PO contracts are formula related and linked to around 80% of the upstream propylene contract price movement. In July, the majority of PO contracts prices are likely to edge up slightly, in line with the formula pass through level. Freely negotiated business, which remains limited in nature is likely to follow a similar tendency in early Q3, amid a largely balanced market. PO contract prices will largely be determined by upstream propylene contract price developments during the third quarter, as the majority are formula related. The general feeling is that PO contract supply is sufficient for requirements and buyers said that any logistical constraints linked to the recent French strike action was manageable. One producer said that while the PO market is moving more balanced in early Q3 when compared to the past few months, post maintenance period and as the widespread French strike action dissipates, it said that stocks still remain relatively low and they still need to be replenished. Views on demand range from reasonable to healthy, depending on source. While some slowdown in activity is expected in southern Europe during the summer, less of a slowdown is likely in northwest Europe due to the staggeed nature of holidays.
In Asia, PO prices in the third quarter are expected to soften after having mostly moved sideways in Q2. This is due to especially weak downstream polyols demand this year in the midst of the traditional lull demand season in June and July amid ample spot availability in the China domestic market.
In the US, the PO market is for the most part captive and as a result, PO contracts are formula related and will follow feedstock developments during the third quarter
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Propylene Oxide Methodology
About Propylene oxide
Propylene oxide (PO) is a very volatile, colourless, flammable liquid with a characteristic ether-like odour. PO reacts violently with chlorine, ammonia, strong oxidants and acids causing fire and explosion hazards.
Propylene oxide is a highly reactive chemical used as an intermediate for the production of numerous commercial materials. The largest derivative of PO is polyether polyols, one of the main components used in the manufacture of polyurethanes. Propylene glycol (PG) is the second largest PO derivative.
Propylene oxide is made traditionally by chlorohydrin or epoxidation routes. The propylene oxide/styrene monomer (PO/SM) epoxidation process had been gaining in popularity due to its superior economics. However, new PO technologies that do not made coproducts have now been commercialised.
General downstream PO sectors include bedding and furniture; construction and automotive.
Upstream of Propylene oxide
Downstream of Propylene oxide