Price and market trends: China to start up five PDH units; C3 output to grow 2.85m t/yr

24 March 2014 00:05 Source:ICIS Chemical Business

China will start up five new propane dehydrogenation plants (PDH) plants this year that will boost its propylene (C3) production by 2.85m tonnes/year, industry sources said on 10 March. In 2013 propylene output was 1.85m tonnes, whilst capacity was about 2.54m tonnes

Propane consumption in the country is expected to increase by 1.6m tonnes in 2014, taking into account the requirements of the PDH plants that will begin operations throughout the year, they said.

Two of the plants – both located in Zhejiang province and with a 450,000 tonne/year capacity – are coming on stream sometime in the second quarter, while two other units in the same province with bigger capacities of 600,000 tonnes/year each will start production from June to the third quarter.

Asia propylene

China PDH

The biggest of the five plants starting up has a 750,000 tonne/year capacity and will come on line late this year (see table).

China is building up its propylene capacity in anticipation of increased demand from downstream sectors such as polypropylene and acrylonitrile, among others.

PDH plants yield higher propylene output compared with naphtha-based production, and require much less investment, industry sources said.

Higher propane requirements meant that the country will have to import more of the raw material, they said.

China had its first PDH unit last year, with the start-up of Tianjin Bohai Chemical Industry Group’s 600,000 tonne/year facility in the fourth quarter.

The company imported 195,000 tonnes of propane in line with the start of operations at the PDH plant in the last months of 2013. The plant plant requires an annual propane feed of 720,000 tonnes.

A boom in China’s liquefied petroleum gas (LPG) deep processing industry – production of methyl tertiary butyl ether (MTBE), which is used in blending into oil products – has been beefing up the country’s demand for feedstock propane, industry sources said.

In 2013, China imported nearly 2m tonnes of propane, while its domestic propane supply increased by about 3.7% to 1.82m tonnes, according to C1 Energy, an ICIS service in China.

Propane demand from crackers and the residential sector may also rise in 2014, industry sources said.

Most naphtha crackers in China can switch to take propane as feedstock.

Wuhan Petrochemical’s 800,000 tonne/year cracker, which started in August last year – began using more propane and less naphtha as feedstock for production since the start of the year, market ­sources said.

By Vivian Yan