SAN ANTONIO (ICIS)--Availability of US propylene is expected to improve considerably in April, even as a propane dehydrogenation (PDH) unit is scheduled to shut down for a turnaround, sources said on the sidelines of the International Petrochemical Conference (IPC).
“The market is starting to get long in April,” a source said.
Another source felt that the market will be “comfortable” because supply should be “more than balanced”.
Supply in the first quarter had been limited by cracker turnarounds and production issues, and some producers were said to be short.
US Energy Information Administration (EIA) data showed that propylene inventories through 3 March had declined for 10 consecutive weeks, putting stockpiles at their lowest levels in six months.
However, supply has improved somewhat as two olefins units have restarted after completing planned maintenance, and EIA data shows the propylene inventory levels have rebounded in the last two weeks.
Even though Flint Hills is expected to shut down on 1 April for a 50-day turnaround, according to market sources, supply should be ample.
“Heavy cracking and lower demand should offset that,” a source said.
Several downstream plants are scheduled to shut down for planned maintenance, which will lower propylene consumption.
Sources said this will also give propylene producers the opportunity to replenish low inventories.
Meanwhile, olefins producers are “cracking as heavy as they can” because of low propane and butane and high co-product prices, sources said. This should increase output of co-products including propylene.
Additionally, margins have been “incredible” for metathesis units and propylene splitters because of low ethylene and refinery-grade propylene prices, incentivising higher run-rates for those operations.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.
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