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 Q4 2020
Supply was generally tight in northeast Asia in Q4, with several unplanned outages limiting spot cargoes available for export. Notably, South Korea’s LG Chem shut down its cracker in Yeosu in early November following a fire at the main control room, while Japan’s ENEOS Corp shut its cracker in Kawasaki in early December to resolve a technical glitch. The tight supply situation was eased by the return of Lotte Chemical’s cracker in Daesan, South Korea, following an extended outage.
Demand for imports in China dipped in Q4, as anticipation of new capacities weighed on buying sentiment. In particular, buying interest wavered on news that Fujian Meide Petrochemical was on track to start up its propane dehydrogenation (PDH) unit during the quarter. In addition, sentiment was affected by weakness in the downstream PP market. However, the decline was offset by increased demand in South Korea due to unplanned plant outages and delays in the restart of some plants from planned turnarounds.
Propylene supply tightened significantly during Q4, bucking the usual seasonal trend. A succession of cracker issues alongside planned and longer-running outages cut availability across Europe. In addition, the onset of fresh lockdowns led to cutbacks from refineries. Producers had intentionally short-planned given the usual low inventory expectations for the year-end. The tightness saw spot prices at a premium to the prevailing contract price for the first time in three years.
Demand was much stronger than anticipated for the year-end period. Inventories across all derivative chains were low and unable to accommodate the better- than-expected demand from lower down the chain. Exporters continued to be boosted by their competitive cost position relative to the US and Asia. Some derivative production was limited by the lack of sufficient propylene feedstock. Contractual offtake was maximised.
While production recovered slightly from Q3 on cracker restarts, sub-80% refinery utilisation continued to tighten propylene supply in Q4. While cracker operating rates were higher, PDH outages curbed production. Inventories fell to their lowest levels in over two decades as supply struggled to meet demand.
Demand for propylene in Q4 grew faster than the broader economy as downstream PP producers sought to build back inventory following a unexpectedly unproductive Q3. Demand from packaging and fibre applications has been strong since the start of the pandemic, while demand for durable goods such as automotive and appliances has been picking up since the beginning of Q3.
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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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