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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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