Transparent Propylene Market: Ceresana Publishes First Study on the Entire US Propylene Value Chain

08-Aug-2014 - Germany

propylene is one of the most important base materials for the petrochemical industry. The market research institute Ceresana has now published the worldwide first complete study of the entire propylene value chain in the USA: Starting with the feedstocks gasoil, naphtha and propane, up to the several downstream products and the corresponding end markets, the complete US market for propylene is analyzed. Additionally, Ceresana offers forecasts until 2021.

Propylene – Important Petrochemical

The importance of propylene becomes apparent in its market volume. More than 14 million tonnes were consumed in the USA in 2013. Thus, propylene is the second most important petrochemical feedstock after ethylene. Downstream industries manufacture a range of products based on propylene. Direct applications include, besides the plastic polypropylene, chemicals such as propylene oxide, acrylonitrile, cumene, butyraldehyde, acrylic acid and isopropanol.

Fracking to Influence Propylene Prices

As a result of the shale gas boom, ethane became much more important for steam crackers. In contrast to other feedstocks such as naphtha or gasoil, the cracking of ethane yields a rather high amount of ethylene but only small amounts of propylene. This development has a notable influence on prices for propylene and ethylene in the USA. The change from naphtha based crackers to ethane based production reduced the supply of propylene and increased volatility of prices.

More Propylene by Dehydration of Propane

In order to counteract the supply deficit, the USA will manufacture an increasing amount of propylene from propane. Dehydrogenation of propane is a way to produce a high amount of propylene directly. Ceresana expects the share of propane in propylene production to rise to more than a third in 2021. Manufacturers are profiting from increasing propane supply in the USA.

Polypropylene Prime Application

Propylene is mainly processed into polypropylene. Ceresana forecasts US demand for this standard plastic to increase by about 2% until 2021. Polypropylene is one of the most common packaging materials. Other applications include fibers, textiles, vehicle parts, electrical devices and household goods.

Polyurethane Scoring With Versatility

The segment propylene oxide is highly dependent on the US market for polyurethane (PUR). PUR demand in the USA recovered comparatively quickly after the economic crisis hit, pre-crisis levels were already exceeded. The development on the PUR market is supported by innovations in particular, which continue to open up additional application areas. The manifold application possibilities include building insulation, cooling and refrigerating units, furniture and bedding, shoes, vehicles, varnishes, coatings, adhesives, binders, and rubber. But also the segments sports and leisure as well as electronics and electrics are reporting a rising demand for polyurethanes.

Limited Growth for Oxo Alcohols

Butyraldehyde, manufactured from propylene using oxo synthesis, is processed directly in to the oxo-alcohols butanol and 2-ethylhexanol in the USA. Butanol is used in the production of varnishes, fragrances and the syntheses of ethers and esters, while 2-ethylhexanol is, amongst others, utilized in various plasticizers. We expect downstream industries to provide only limited impulses for oxo alcohols in the near future.

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