The major outlet for propylene glycol (PG) is in unsaturated polyester resins (UPRs) used in surface coatings and glass fibre reinforced resins. The second-largest consumer is functional fluids such as de-icing and antifreeze. PG is also consumed in plasticisers and hydraulic brake fluids. Other uses are in non-ionic detergents and as a humectant in the pharmaceutical, cosmetics, animal foodstuffs and tobacco industries. PG is an excellent solvent and extractant.
Overall demand in Europe is steady. All major consuming sectors are taking normal volumes and supply is currently balanced to long. Supply of dipropylene glycol (DPG) and tripropylene glycol (TPG), however, is tight and demand is quite strong. The US PG market is fairly balanced but demand in the key Chinese market remains weak.
The European market saw flat growth last year compared with 2004. However, sales in the de-icing sector were up in quarter one this year and the PG market is expected to return to growth in 2006. Exports also dropped off last year, as new capacity went online in Asia. Nihon Oxirane, the Sumitomo Chemical/Lyondell joint venture, started up a 90 000 tonne/year plant in Japan in April 2005. CNOOC and Shell Petrochemicals’ 60 000 tonne/year plant went onstream in China in February 2006.
European prices have been fairly stable but are now experiencing downward pressure in a very lacklustre spot market. Prices for industrial grade are quoted in the range €1130–1160/tonne but buyers are scarce. Producers are trying to secure a rollover for July but players predict that prices will slip during the summer lull by €20–€50/tonne. Margins are reasonable, although propylene costs have risen by €5/tonne this quarter. Suppliers are expected to push for better margins in September/October.
PG is produced commercially by the hydration of propylene oxide (PO). DPG and TPG, and small volumes of higher glycols, are also produced. PG production is driven by PO availability and extra PG can be produced to balance PO. The reaction between PO and water takes place at a temperature of 200°C and 12 bar pressure. The amount of water is controlled to favour PG production. The reaction mixture is dehydrated by evaporation and the various glycols are separated by distillation.
PG processes are being developed based on carbohydrates and glycerols, which are cheaper than petroleum-based feedstocks. Metabolic Explorer has been granted a patent in France for its fermentation process. The University of Missouri has developed technology that is based on converting natural glycerine. Archer Daniels Midland plans to build a plant using agricultural raw materials to produce pharmaceutical and industrial grade PG.
Global growth is put at 4.5%/year to 2010. The strongest growth is in Asia, mainly China, and demand in east Asia is forecast at more than 7%/year to 2010. No major projects have been announced although Lyondell is in talks with Sinopec for a project in Ningbo, China, producing 100 000 tonne/year of PG. This would be part of Zhenhai Refining and Chemical’s proposed cracker complex to go onstream in 2009.
PG may see some substitution by lower-priced glycerine in specific sectors but producers do not see this as a major threat as there are many applications where glycerine can not be used as an alternative.
>> Profile last published 12 July 2004
GLOBAL PROPYLENE GLYCOL CAPACITY ’000 TONNE/YEAR
|Arch Chemicals||Brandenburg, ?Kentucky, US||35|
|Asahi Denka||Sodegaura, Japan||33|
|Asahi Glass||Kashima, Japan||42|
|CNOOC/Shell Petrochemicals||Huizhou, China||60|
|Dow Chemical||Altona, Australia||15|
|Freeport, Texas, US||160|
|Plaquemine, ?Louisiana, US||135|
|Huntsman||Port Neches, Texas, US||65|
|Industrias Derivadas del Etileno||Puebla, Mexico||10|
|Ineos Olefins||Cologne, Germany||100|
|Jin Hua Chemical||Huludao, China||20|
|Lyondell||Bayport, Texas, US||250|
|Manali Petrochemical||Chennai, India||15|
|Nihon Oxirane||Sodegaura, Japan||90|
|Novacke Chemicke Zavody||Novaky, Slovakia||2|
|Oltchim||Rimnicu Vilcea, Romania||9|
|PCC Rokita||Brzeg Dolny, Poland||4|
|Repsol YPF||Puertollano, Spain||22|
|Sasol Germany||Marl, Germany||18|
|Seraya Chemicals||Pulau Seraya, ?Singapore||65|
|SKC Chemicals||Ulsan, South Korea||50|