ICIS provides reliable and trustworthy weekly price assessments for propylene in Asia, China, Europe and the US. Daily market intelligence is also available for coverage of the Asian markets. Depending on the region, quotations are for spot and contract. Our locally-based expert reporters can provide those involved with propylene or related markets with up-to-date and unbiased intelligence allowing this essential tool to be used in decision-making processes.
Market commentary gives news and analysis on day to day activity, production updates, upstream and downstream movements, import and export activity and any other key factors influencing prices.
Updated to Q2 2019
Supply was tight in northeast Asia for June arrivals, resulting in higher prices. The tight supply was caused by various turnarounds in the regions. For example, YNCC and GS Caltex both conducted their planned maintenance work in the quarter in Yeosu, South Korea. The tightness in the region was exacerbated by an unplanned shutdown in South Korea. Hanwha Total’s cracker saw its planned shutdown extended. LG Chem’s cracker also suffered an unplanned outage early in June.
Demand from China was generally stable in April and May. There was some slightly decrease noted towards the tail end of the quarter as certain downstream markets were suffering from negative margins. Some operators decided to reduce their run rates to protect their margins and to simulate their respective spot markets. In early June, the market was supported by some short covering but those actions dissipated after some producers managed to recover from their unplanned outages.
Propylene supply was more balanced in the second quarter. Planned cracker and refinery maintenance got under way and together with some unplanned production restrictions in the inland area, supply tightened and spot prices rose in thin activity. Imports from the US continued to flow, attracted by Europe’s high price position, which meant there was ample availability in the coastal sector. By the end of the quarter, turnarounds were coming to an end.
Demand varied in the second quarter depending on the derivative sector. Core polymer demand was largely in line with expectations but demand for incremental production was muted with players citing affordability issues. Demand from some non-polymer sectors was regarded as poor having been negatively impacted on the export front by Europe’s high price position relative to the rest of the world. The unresolved US-China trade dispute continued to weigh on general sentiment.
US propylene supply levels dropped during Q2 as ExxonMobil and BASF Total underwent planned maintenance at their crackers, which lasted for most of the quarter. Refinery operating rates continued to be strong, and any cracker operators that could use heavier natural gas liquids (NGL) in their feedslate – which yields more propylene – were doing so. Inventory levels declined weekly throughout the quarter, but remained near record highs. As such, supply outpaced demand throughout the quarter.
US propylene demand was steady during Q2 and likely at its peak for the year. Amid a dim economic outlook, demand was weak across the board from downstream sectors such as automotive and construction. The usual Q2 demand uptick was not as robust as usual. Export demand was strong and inventories declined. Despite the decline in inventories, supply outpaced demand significantly, leading to a spot price drop late in the quarter.
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Propylene is a colourless, highly flammable gas. It is produced by several routes, the most common of which is as a co-product of ethylene production from steam crackers.
Propylene is a colourless, flammable gas that burns with yellow, sooty flames. It is a dangerous fire risk because it is highly flammable and explosive when mixed with air or oxygen.
The dominant outlet for propylene is polypropylene (PP). Propylene is also used to produce acrylonitrile (ACN), propylene oxide (PO), a number of alcohols, cumene and acrylic acid.
The two main sources of propylene are as a byproduct from the steam cracking of liquid feedstocks such as naphtha as well as LPGs, and from off-gases produced in fluid catalytic cracking (FCC) units in refineries. The remainder of propylene is produced using on-purpose technologies such as propane dehydrogenation (PDH) and metathesis.
Propylene is highly flammable and needs to be stored in pressurised or refrigerated tanks.
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