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.
If you’re involved in this market, ICIS can provide you with this essential tool to make informed and confident business choices.
Updated to Q3 2019
Propylene oxide (PO) cargo availability in Asia was long for most part of the quarter, especially since cargoes from regions like the Middle East were also actively coming in. Stiff competition among regional producers contributed to downward pressure on spot pricing in the market, as offers were dropped to encourage cargo uptake among buyers. There were also limited outages and scheduled turnarounds seen in the third quarter, leading to largely unchanged supply conditions throughout.
Demand for PO was sluggish, as buyers maintained a conservative stance towards cargo uptake so as to manage inventory levels more effectively. The devaluation of the Chinese yuan against the US dollar weighed on import trade on a CFR China basis, as it became less cost-effective for Chinese buyers to import. Most buyers preferentially purchased cargoes in smaller quantities from the local market in yuan, in order to minimize potential losses should market conditions worsen.
There was more than enough material available on the PO market during Q3. Scheduled outages were well planned for and soft downstream demand, especially in to the polyols sector, meant that any turnarounds had very little impact on the market. Some PO volumes were switched to producing MPG rather than polyols, as polyols demand was hit by a weak automotive market. Low summer activity resulted in suppliers turning down operating rates to match demand in some cases.
PO demand was varied in Q3 depending on the downstream market, but was lower overall. More stable end-use sectors such as food and feed and personal care saw steady activity. But PO demand was significantly impacted by a poor polyols market, which is by far the largest downstream market, as automotive sector demand remained weak. Downstream MPG was also slow as offtake into construction was not exceptional and it is too early for de-icer demand to take effect.
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Over 80% of propylene oxide (PO) goes into two main uses: polyether polyols (60%) and propylene glycol (21%).
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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