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 Q1 2020
Supply was on the tight side in south Korea and Taiwan in Q1 with a few turnarounds. SK Advanced’s propane dehydrogenation (PDH) unit was shut in late January and restarted in early March. FPCC shut its residue fluid catalytic cracking (RFCC) on 2 March for about 40 days. In Japan, at the end of Q1, downstream units began cutting run rates to manage high inventories.
Demand from China was generally weak in Q1 due to the coronavirus outbreak, which coincided with the plant shutdowns during the Lunar New Year holiday. Downstream units took longer to restart as there were logistical restrictions and weak demand downstream. A large drop in crude oil prices in early March also hit already fragile buyer confidence.
A couple of unplanned outages at crackers, the planned maintenance at the Antwerp propane dehydrogenation (PDH) , as well as some tweaks on rates to contain ethylene all combined to constrain supply. Imports from the US and Asia relieved the tightness but by then concerns over the coronavirus were beginning to take their toll and supply ended the quarter on a much more balanced footing.
Demand was firm as players sought to replenish stocks amid a tighter than expected supply scenario. With the advent of the coronavirus pandemic, demand remained better than expected for those derivatives with applications in the packaging, medical and sanitary-ware sector, but automotive was particularly hard hit. Concerns over supply chain disruptions due to lockdowns also led some players to build buffer inventory.
Inventories heading into Q1 were around 7% lower (according to Energy Information Administration estimates) on lower refinery rates and less liquefied petroleum gas (LPG) cracking. Higher winter heating demand tends to raise the prices of propane and butane, encouraging more ethane cracking. Pressured margins due to plunging oil and the coronavirus caused refiners to decrease their rates at the end of March to their lowest levels in nearly three years.
Propylene demand into polypropylene (PP) and other derivatives stayed depressed during Q1 amid a continued slowdown in global manufacturing activity. Demand was further muted by the global economic disruption caused by the coronavirus. The Institute of Supply Management’s (ISM) US purchasing managers’ index (PMI) fell in each of the first three months of the year as the virus spread across the globe.
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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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