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 2019
Supply was fairly stable at the start of the quarter, and lengthened slightly towards the end after the planned maintenance works were completed for the year. There were also more spot cargoes available in Japan after demand from downstream units fell during the year-end lull. Supply in Shandong and east China also lengthened after Luxi Chemical started its methanol-to-olefins (MTO) unit and Zhejiang Petrochemical started selling propylene. Cracker operators ended the year mulling cuts.
Demand from China was generally stable for imports. While many decided to stay out of the import markets amid ample domestic supply, especially those in the east China region, some in farther locations such as the river ports and Shandong region were still purchasing. Taiwanese buyers were seeking February arrivals, but offers from sellers have yet to emerge. Downstream demand in Japan was weak.
Propylene supply was very lengthy throughout the fourth quarter despite maintenance outages and a couple of lingering unplanned outages. Some cracker operators reduced operating rates directly as a result as high inventory levels, low consumption meant that there was very limited space to accommodate volumes. The oversupply led to added challenges logistically with railtank cars and barge availability restricted due to being used for storage. Spot prices were heavily discounted against the prevailing contract reference prices.
Propylene demand continued to under-perform moving into the fourth quarter and consumption dropped off more significantly in November and December as players worked to de-stock inventory. Core demand for polymer fared better than that for non-polymer derivatives but by December was also under pressure on the back of macroeconomic worries. Spot prices were very low but few buyers were able to take advantage on account of limited storage space and/or high volume contract obligations.
Inventories increased by about 36% during the fourth quarter of 2019 on higher refinery rates and elevated liquefied petroleum gas (LPG) cracking encouraged by cheaper propane and butane. Increased cracker productivity in the wake of September and October production issues and start-ups late in the year further lengthened already long supply. Typical year-end destocking mitigated supply growth to a limited extent, but inventories ended 2019 near three-year highs.
Demand for polypropylene (PP) and other propylene derivatives stayed depressed during the fourth quarter of 2019 amid a slowdown in global manufacturing activity. Institute for Supply Management (ISM) data indicated that the US manufacturing market contracted in each of the three months in the quarter. Two extended PP plant shutdowns inhibited demand for propylene. In addition, some PP plants were heard to have reduced their operating rates, which would have further shrunk demand.
We offer the following regional Propylene analysis and news coverage to keep you informed of factors and developments affecting prices in the Propylene marketplace.
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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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