Propylene Oxide Methodology
Over 80% of propylene oxide (PO) goes into two main uses: polyether polyols (60%) and propylene glycol (21%). Polyether polyols are used in the manufacture of polyurethanes, in reaction with MDI or TDI , while propylene glycol finds a major outlet in unsaturated polyester resins (UPR). Other uses include production of propylene glycol ethers, flame retardants, synthetic lubricants, oil field drilling chemicals, butanediol, propylene carbonate, alkyl alcohol, isopropanolamines, modified starches and textile surfactants.
Propylene oxide is a volatile, colourless, flammable liquid with a characteristic ether-like odour. It is soluble in water, alcohol, ether, most organic solvents and forms a two-layer system with water. It may polymerise violently due to high temperatures or under the influence of bases, acids and metal chlorides with fire or explosion hazard.
ICIS pricing quotes Propylene Oxide in Europe, Asia-Pacific and the USA.
Published weekly on Fridays.
Propylene Oxide (EUROPE)
Weekly Price Assessments:
PO Market Prices
- FD NWE (MISC) (EUR/MT & conversion to US CTS/LB)
PO Feedstock Prices
- PROPYLENE FD NWE Monthly (EUR/MT & conversion to US CTS/LB)
Propylene Oxide (ASIA-PACIFIC)
Weekly Price Assessments:
PO Quarterly Contract Prices
- DEL KOREA (KRW/KG & conversion to USD/MT)
- DEL JAPAN (JPY/KG & conversion to USD/MT)
PO Spot Prices
Propylene Oxide (USA)
Weekly Pricing Assessment:
PO Monthly Domestic Price
- FOB (US CTS/LB & conversion to USD/MT)
Assessment window: Price assessments are based on information supplied by market participants through the week up to close of business on Fridays at 1800 hours in London, Singapore and Houston.
Specification: Purity of 99.7% by weight.
Timing: Typically, cargoes loading or delivered four-six weeks forward from the date of publication. In Europe, truck loads delivered in the week, month or quarter being reported. In Japan and Korea, prices are fixed retroactively and often on a quarterly basis. They refer to loading or delivery within the stated quarter. In China, spot prices refer to product loaded or delivered within the week of writing.
Terms: Typically, 30-60 days after bill of lading date. In Europe also 30 days EOM (from 30 days of date of invoice to 30 days after the end of the month in which the product was delivered).
Standard cargo size: In Europe, a typical truck size is 20-24 tonnes and a miscellaneous consumer represented in the price range buys between one to 10 trucks per month. In the US, tank trucks of 45,000 lb or railcars of 150,000-160,000 lb.
In China, domestic spot deliveries are mainly on a truck basis of 20-25 tonnes per truck. In Japan, small buyers purchase truck loads or iso-tanks at 8-10 tonnes/truck and 16-20 tonnes/iso-tank. A few big buyers purchase PO in 500-1,000-tonne barges. The Japanese price range encompasses prices for small and big buyers. In Korea, big buyers are fed via pipelines, while small buyers purchase PO in tank trucks or drums.
In Europe, the official range covers quarterly contract business for miscellaneous consumers, i.e. excluding the non-polyol sector. The contracts include both formula and freely negotiated business, although the greater proportion of the market is reflected by the first type which is based on 80% of the propylene feedstock movement.
In Europe there are two major producers and four smaller manufacturers of PO. There are also integrated players who both produce and sell PO as its derivatives. This makes it very difficult for non-integrated buyers of PO to pass on any price movements to their end-use market.
There are four major producers in Japan and one in Korea. Most of these are integrated and who also make and sell PO-derivatives. Both countries are PO-self sufficient and settle contract prices on a delivered basis on formula involving feedstock costs. In China , most domestic suppliers are also integrated producers and downstream polyol or propylene glycol capacities and only one is currently known to be producing solely PO with no downstream capacity. As a result of this captive use, imports are necessary.
In the USA, there are four major producers of propylene oxide, with the bulk of production being captive. Product usage is typically for integrated downstream operations, for example, mono propylene glycol. The ICIS monthly contract assessment is a calculation based on propylene feedstock and value into the polyol and MPG sectors, and verified with the industry.
The USA report carries a price assessment with no market commentary. The Europe and Asia reports offer market commentary that includes details of traced transactions, news on the supply/demand balance, export/import information, contract price negotiations and general sentiment for price direction. Where applicable there is product information, comments on up and downstream market developments and general market intelligence.
18 December 2012