Propylene Uses and Market Data

2010/05/14

The dominant outlet for propylene is polypropylene (PP), accounting for nearly two-thirds of global propylene consumption. Propylene is also used to produce acrylonitrile (ACN), propylene oxide (PO), a number of alcohols, cumene and acrylic acid .

There are three grades of propylene; polymer grade with a minimum purity of 99.5%; chemical grade with a minimum purity of 93-94%; and a refinery grade with a purity of around 70% with a minimum of 60%.

Propylene used to make PP straws (source: Basell)

Polypropylene is one of the most versatile of the bulk polymers due to a combination of good mechanical and chemical properties. Hence PP has secured its position in a wide range of consumer and industrial products, manufactured by several high-volume forming methods. In the automotive sector, PP and its alloys have become the polymer of choice accounting for over a third of plastics used in automobiles.

Injection moulded PP, the largest of the PP grades, can be used in electronic and electrical appliances, house wares, bottle caps, toys and luggage. Film grade PP can be found in the packaging of sweets and cigarettes, tapes, labels and electronic films. PP fibres are used in carpets, clothing and the replacement of sisal and jute in ropes and string. PP can be extruded into pipes and conduit, wire and cable.

During the 1990s, PP demand grew at about 10%/year, outpacing the other major thermoplastics. Some of this growth was due to substitution of other polymers as PP was less expensive due to low propylene prices. Since then propylene prices have risen relative to other base chemicals and PP prices are now similar to other polymers. Growth in PP demand has slowed to an average of 5-6%/year.

The second largest derivative, acrylonitrile is used in a variety of elastomeric polymers and fibre applications. The largest outlet for ACN is acrylic fibres, which are used in clothing such as sweaters and jumpers, socks and sports wear as well as home furnishings and bedding such as carpets, upholstery, cushions and blankets. Other uses for ACN include nitrile rubber, acrylonitrile-butadiene-styrene (ABS)/styrene acrylonitrile (SAN) resins, acrylamide and adiponitrile.

The next largest outlet for propylene is propylene oxide. PO is used to make polyether polyols, which are reacted with an isocyanate to form polyurethanes. Polyurethane end uses include flexible foams for the furniture and automotive industries, and rigid foams for appliance and building insulation. PO is also used to make propylene glycol, which is used in unsaturated polyester resins, antifreeze and aircraft de-icing fluids, and propylene glycol ethers with applications in paints, coatings, inks, resins and cleaners.

A number of alcohols are made from propylene. Isopropanol (IPA) is used mainly as a solvent in cosmetics and personal care products, paints and resins, pharmaceuticals, food, ink and adhesives.

The oxo-alcohol 2-ethylhexanol is used mainly in the production of phthalate plasticisers but it is also used in adhesives and paints. Butanols are employed in paints, coatings, resins, dyes, pharmaceuticals and polymers.

Cumene, which is produced from propylene and benzene, is the main feedstock for the manufacture of phenol and acetone. They are used to produce a variety of products such as polycarbonate, phenolic resins, epoxy resins and methyl methacrylate (MMA).

Acrylic acid is used in the production of acrylic esters and resins for paints, coatings and adhesives applications.

China PP demand leads global propylene recovery

Global demand for propylene recovered in 2009 due to a rebound in PP demand in China, according to US-based consultants DeWitt & Co. China’s consumption of PP accounts for more than 15% of the world’s propylene demand. PP demand is also growing much faster than the other derivatives with DeWitt predicting growth rates of 5-6%/year.

However, propylene capacity is also growing strongly with 13-14m tonnes/year of new capacity coming on-stream in 2009 and 2010, says DeWitt. Steam crackers account for most of the additional supply, mainly in China but also Singapore, Thailand and India. New refinery-based supply such as the PetroRabigh and Reliance units in Saudi Arabia and India respectively has contributed to the new capacity.

On-purpose processes are also becoming more significant in the supply of propylene. A number of propane dehydrogenation (PDH) plants started up in Saudi Arabia in 2009 and new units are planned in the US and Thailand for 2010. A large metathesis plant will account for new propylene supplies in Abu Dhabi and coal-based propylene production is scheduled to start up in China in 2010.

While there appears to be plenty of capacity to meet demand, supplies of propylene have been restricted by co-product production from steam crackers and refinery operations. In addition, much of the new propylene capacity is associated with the new PP plants and in some cases propylene can not be exported from these plants. Although PP demand is expected to grow strongly in Asia, there is an abundance of capacity that will keep operating rates in the low 80s%, says DeWitt.

In western Europe, propylene demand has been hindered by both a slow economic recovery and a decline in PP exports due to the expansions in the Middle East and Asia. However, this lack in demand has been offset by restricted supplies. Refineries were hit hard by the recession but should recover somewhat. Steam cracker operators have been consuming more propane and butane feedstocks resulting in the propylene to ethylene production ratio falling.

The propylene balance in western Europe hinges on whether the loss in demand from the decline in PP exports will be more or less than the loss of supply from cuts in ethylene production rates due to growing ethylene derivative imports from the Middle East, concludes DeWitt.

US propylene supplies tighten

In the US, propylene supply had tightened by early 2010 as steam cracker production was significantly impacted by the loss of ethylene demand. In addition, there has been more ethane cracking resulting in a drop in propylene production.

DeWitt estimates that propylene to ethylene production ratios have dropped from close to 0.3lbs to just over 0.2lbs of propylene per tonne of ethylene produced, a drop of more than 20%. With a fall in ethylene operating rates, around 30% less propylene in the US was being sourced from steam crackers.

The prospect of more refinery propylene in the US also looks limited due to increased use of biofuels, rising fuel efficiency standards and gasoline imports. However, the US will get a boost in supply when Petrologistics starts up its 540,000 tonne/year PDH unit in Houston, Texas in the summer of 2010.

On the demand side, the US will lose its PP export markets due to the new competitive capacity coming on-stream. Domestic demand for all derivatives is recovering, some more slowly than others, but it should result in more propylene demand.

(Updated: April 2010. Sources: DeWitt 35th Annual World Petrochemical Conference, Houston, Texas, 24-25 March 2010; ICB Chemical Profile, 7 December 2010.)