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Propylene TRACY DANG profile last published 16 November 2012
Uses half of the year. In 2016, US propylene prices US propylene capacity
Propylene is mainly used to make polypro- have been on an uptrend, which has also im- ’000 TONNES/year pylene (PP), which accounts for nearly two- pacted demand. Company LocationCapacity thirds of global consumption. Other outlets ExxonMobil Baytown, Texas 1,700 include acrylonitrile (ACN), propylene oxide Prices Chemical (PO), a number of alcohols, cumene and US propylene contracts for September settled LyondellBasell Channelview, Texas 1,450 acrylic acid. at a significant hike of 6 cents/lb amid contin- ExxonMobil Baton Rouge, 1,275 ued tightness in overall supply. Chemical Louisiana Supply/demand The settlement puts polymer-grade propyl- Shell Chemicals Norco, Louisiana 1,065 US propylene supply has been significantly ene (PGP) at 43.0 cents/lb ($948/tonne) and Flint Hills Houston, Texas 635 reduced this year, with weekly statistics from chemical-grade propylene (CGP) at 41.5 Resources the US Energy Information Administration cents/lb. September marks the fourth consec- BASF Total Port Arthur, Texas 635 (EIA) showing that inventory levels in 2016 utive month of increases, and PGP contract are about 40-50% down from 2015. prices have climbed by 43% from February, Formosa Plastics Point Comfort, Texas 575 The year-on-year inventory drop is partial- before the overall uptrend began. The settle- Dow Chemical Freeport, Texas 545 ly because of a heavy cracker turnaround ment also puts propylene contracts at their Chevron Phillips Sweeny, Texas 545 schedule in 2016, as well as a number of out- highest level since April 2015. Chemical ages amid crackers, propylene splitters and US propylene contracts typically settle in the INEOS Alvin, Texas 515 propane dehydrogentation (PDH) units. Ad- first half of the month for the rest of the month, LyondellBasell La Porte, Texas 480 ditionally, Dow Chemical’s new PDH unit in but September discussions stretched toward ExxonMobil Beaumont, Texas 475 Freeport, Texas – which started up in Decem- the end of the month, as buyers and sellers Chemical ber 2015 – has been operating on and off could not agree on the extent of the increase. For Chevron Phillips Cedar Bayou, Texas 450 throughout the year. October, a producer nomination had emerged at Chemical Supply has been further constrained in the an increase of 1 cent/lb, but there was sentiment Marathon Garyville, Louisiana 430 summer and autumn months because of ex- that upward movement was unlikely, given the Petroleum tended cracker turnarounds and ongoing pro- hike from the previous month. Shell Chemicals Deer Park, Texas 420 duction issues. On the demand side, sources While October contracts have yet to settle, Total Port Arthur, Texas 415 said that propylene consumption has been discussions are mostly centering around a Petrochemicals off-track during the first half of the year be- rollover to slight decrease. Dow Chemical Plaquemine, Louisiana 390 cause of high PP imports. This has been at- Phillips 66 Linden, New Jersey 360 tributed to PP producers not passing through Technology Chevron Phillips Port Arthur, Texas 355 the full decrease in feedstock propylene costs Propylene comes in three grades: polymer Chemical at the end of 2015. With US PP prices high grade (99.5% minimum purity), chemical Phillips 66 Belle Chasse, 355 compared with other regions, the US saw an grade (93-94% minimum purity), and refin- Louisiana increase in PP imports for much of the first ery grade (60-70% purity). Flint Hills Port Arthur, Texas 340 Propylene is a by-product of steam crack- Resources US PROPYLENE ing of liquid feedstocks such as naphtha and INEOS Carson, California 330 liquefied petroleum gas (LPG), as well as off- Cents/lb, polymer grade, contract Motiva Enterprises Convent, Louisiana 310 45 gases produced in fluid catalytic cracking (FCC) units in refineries. It is also made via LyondellBasell Corpus Christi, Texas 250 on-purpose technologies such as propane de- Eastman Chemical Longview, Texas 230 40 hydrogenation (PDH) and metathesis. completing planned turnarounds. Additionally, Outlook two crackers – one which resumed operations in 35 The September contract hike has curbed some July, and one that is expected to restart at the end demand for US propylene, with many deriva- of October – are coming out of turnarounds with tive plants taking the opportunity to conduct expanded ethylene capacity, which should 30 maintenance work and curtail consumption. boost supply of co-products such as propylene. Some sources questioned whether the extent Sources said those factors should ease some of of the September contract increase would soften that pressure on US propylene prices. ■ 25 Oct Sep demand for only October or for the remainder of Subscribe to ICIS pricing reports to keep 2015 2016 the year. Supply wise, the current snugness is up with a wide range of chemical markets expected to improve as crackers restart after across the globe at icis.com
46 | ICIS Chemical Business | 24-30 October 2016 www.icis.com
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