MOSCOW (MRC) -- About 85 million tonnes of propylene, the second most important petrochemical feedstock, were consumed worldwide last year, according to a recent study, said Tradearabia.
The study by market research institute Ceresana pointed out that its direct applications include production of important chemicals such as propylene oxide, acrylonitrile, cumene, butyraldehyde and acrylic acid, besides the plastic polypropylene.
The study analysed the effect of the shale gas boom in the US and the new production processes will have on the global market for propylene and its derivatives, said Oliver Kutsch, chief executive officer of Ceresana. The forecast was provided for up until 2021.
A large share of propylene output occurs either as by-product in the steam cracking of ethylene or catalytic cracking in refineries, it said. As a result of an increasing use of ethane, steam crackers produce more and more ethylene and less and less propylene. But Ceresana expects a rising amount of propylene to be manufactured using on-purpose technologies. This development is expected to lead to a stabilisation of prices for propylene.
Therefore, Ceresana expects propylene revenues to rise at a lower rate of 5.3 per cent per annum until 2021, compared to the previous eight years, even though demand for propylene continues to rise quite significantly.
The most important of the on-purpose technologies for the production of propylene is the dehydrogenation of propane (PDH technology). Given an increasing price differential between propylene and propane, this technology is becoming more profitable not only in countries with extensive gas resources, said the study.
The new PDH plants are currently put on stream in various regions and production potential for propylene will rise accordingly, it said.
Supported by the new PDH plants, propylene production in North America is set to rise significantly in the future after output fell between 2005 and 2013. The highest growth rates, on the other hand, has been forecast for Eastern Europe, where development will be dominated by Russia, and the Middle East. Western Europe, however, will suffer the combined effects of increasing international pricing pressure and weak demand development, with the study anticipating a decline of production volume in this region.
As a result of the limited Chinese crude oil resource, manufacturers of propylene are dependent in imports. Output of non-crude oil based propylene products is to be increased considerably in the future.
In order to achieve this goal, new coal to olefins (CTO) and PDH plants will be put on stream. According to Ceresana analysis, Chinese production will increase by up to eight per cent in upcoming years. Due a rapid surge of demand, however, China will continue to import large amounts of propylene.
MRC