ICIS Value Chain: Propylene oxide

■ Over 80% of PO goes into two main uses: polyether polyols (60%) and propylene glycol (21%). Polyether polyols are used in polyurethanes, in reaction with methyl di-p-phenylene isocyanate (MDI) or toluene di-isocyanate (TDI), while propylene glycol finds a major outlet in unsaturated polyester resins (UPR).

■ The ICIS monthly contract assessment in the US is a calculation based on propylene. US PO prices are expected to move in line with changes for propylene.

■ There are four major PO producers in the US, with the bulk of production being captive for downstream operations.

■ Europe supply for Q3 2014 remains tight after the June explosion at Shell’s facility in Moerdijk, the Netherlands.

■ In China, supply could increase in Q3 with the restart of a local plant, and a new 300,000 tonne/year plant.

■ China spot import availability could remain tight in Q3, if suppliers allocate more PO to Europe or downstream following Shell’s Moerdijk explosion.