Propylene Industry Embracing On-Purpose Technologies to
Counter Supply Shortage
On-purpose technologies have
risen in importance as the costs of heavy feedstock used in steam crackers and
Fluid Catalytic Crackers (FCC) have increased substantially, driven by crude
oil price increases. These two sources account for the largest shares of
propylene production, but high costs have deterred producers from using heavy
feedstocks in steam crackers. In regions where ethane feedstock provides a much
cheaper alternative to heavy feedstock for steam crackers, the propylene
industry is likely to suffer, as light feedstock produce negligible quantity of
propylene. In FCCs, increases in gasoline price drive producers to use chemical
grade propylene for octane blending, rather than selling it to be made into
polymer-grade propylene.
These difficult operating
conditions have encouraged producers to use on-purpose technologies to
manufacture propylene as main product, with lower-cost feedstocks. The most popular
on-purpose technologies are Propane Dehydrogenation (PDH), Olefin metathesis
and Methanol to Olefins/Propylene (MTP). In the Middle East, plants based on
these technologies already account for more than one-third of propylene
capacity, while in Asia-Pacific, North America and Europe, the number of plants
based on these technologies is increasing slowly. According to Publisher
forecasts, plants based on on-purpose technologies are forecast to account for
63.1% of capacity expansion globally over the next five years.
Asia-Pacific will Continue to Drive the Global Propylene
Industry
China will lead the global
propylene industry over the next five years, with the largest consumption and
production increases. The largest end-use sector of propylene is polypropylene,
which is a commodity plastic used in sectors such as automotive, packaging and
electronics. With a rapidly industrializing and urbanizing economy, these
sectors have grown at a fast pace in China. The economic growth is expected to
continue for the next five years, albeit at a slower pace than in recent years,
and propylene demand is also expected to increase.
China will expand its
propylene capacity at the fastest pace of any country over the next five years.
Despite being the second-largest producer of propylene, it is unable to meet
its own rapidly growing domestic demand, forcing the construction of more
capacity. China is forecast to account for 68% of the Asian capacity addition
and 45% of the global capacity addition over the next five years.
China to Expand Coal Based Propylene Capacity through MTP
Plants
The global propylene
industry will witness expansion of coal-based propylene capacity with the
construction of many MTP plants in China. Globally there are currently only
five MTP plants, all of which are situated in China, which use methanol
feedstock derived from domestically available coal. Since China has one of the
largest coal reserves in the world, producers can readily obtain coal for
propylene production. The availability of methanol production units also
creates an environment conducive to the use of MTP plants. This has encouraged
potential investors to invest in MTP plants and has resulted in many new
announcements of planned propylene plants. It is forecast that China will build
13 more MTP plants in the next five years.
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