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 Q1 2017
In the US, there are four major producers of propylene oxide (PO). The bulk of production is captive and 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 based on the price of feedstock propylene. The crude oil price trend is expected to lead direction for US propylene and PO markets in the first quarter of 2017.
The European PO price sentiment in the first quarter of 2017 is likely to follow upstream monthly propylene contract price movements, as the majority of PO contracts are formula related. In the early part of the first quarter, PO producers talked of a tight market, because of healthy demand into the downstream de-icer and polyols sectors. Buyers agreed that demand is faring well so far this year, but they said that they did not see any market tightness. They maintained that their contract volumes are being sufficiently covered. Participants will closely monitor supply, particularly as one main PO plant is believed to be scheduled for maintenance in March/April. However, this has not been officially confirmed.
In Asia, PO prices will likely be stable-to-soft in the first quarter as demand is expected to weaken from mid-January to mid-February because of the Lunar New Year holiday in China. Downstream polyols producers are unlikely to stock up significant PO volumes ahead of the holiday period, which starts in late January, as downstream foam makers are still running their plants at reduced rates following the surge in feedstock toluene di-isocyanate (TDI) domestic prices in October 2016. However, the extent of any downside may be curbed by generally firm raw material prices, including that of propylene.
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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