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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Propylene oxide: Market overview
Updated to Q2 2016
In the US, there are four major producers of propylene oxide (PO), with the bulk of production being captive, and, as a result, minimal market information is available. Product usage is typically for integrated downstream operations, for example, mono propylene glycol (MPG). The ICIS monthly contract assessment is a calculation base d on the price of feedstock propylene. Market sources said that market fundamentals were not supporting an increase for April polymer-grade propylene (PGP) contracts. US PO contract prices for March were assessed at 54.10-58.10 cents/lb FOB US, virtually flat from 54.12-58.12 cents/lb FOB US in November, on a formula-based assessment related to the price of feedstock propylene. No issues with PO availability in the US were noted in late March.
Views on European PO demand range from flat to healthy in the early part of the second quarter, depending on source, and one supplier is confident that demand is likely to be robust during the second quarter. It noted that there were some export opportunities for downstream mono propylene glycol to Asia, in particular. This was believed to be linked to the heavy cracker and PO maintenance schedule in Asia during the second quarter. The PO market is fairly balanced in Europe, because even though there are some PO plant turnarounds, which are due to take place during the second quarter, these are planned and stocks have been built in advance. There has also been some talk recently that PO supply in Europe has improved because of the restart of the Shell and BASF joint venture PO Ellba plant in early 2016, following the lengthy outage period. PO price trend is likely to be linked to upstream propylene developments, as the majority of contracts are formula related.
In Asia, PO prices are expected to slip further in the first half of April after its March uptrend took an about-turn in late March. The easing of domestic feedstock propylene prices is also likely to weigh on prices, although some suppliers were hopeful for prices to be propped up by buyers’ restocking activities.
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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.
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