Propylene Prices Roller-Coaster Ride

Plastics Mar 09, 2013 No Comments

PropyleneSky high and extremely volatile propylene prices are causing fits for buyers of many intermediate chemicals, coatings, and basic plastics such as polypropylene, nylon, ABS and polyurethane.

The forecast is for more volatility for the next two years and then improvement as significant new North American capacity to produce propylene directly from propane come on line.

Propylene prices jumped 12% in January to $1,340 per metric ton, according to Platts Global Petrochemical Index. Prices had been $1,500 a ton a year ago, and then dropped to almost $1,000 a ton last summer.

The reasons for the roller-coaster market dynamics are complicated, and relate to gasoline production, growth of natural gas production in the U. S., and producer strategies to boost profit margins. Despite its importance, propylene has generally been produced as a by- or co-product of something else, and as a result has been whipsawed as fossil fuel economics and production approaches change.

But major users of propylene are fed up. Here’s a list of plants expected to come online by late 2015 to produce propylene directly from propane:

  • Dow: 750,000 metric ton/year plant in Freeport, Texas.
  • Formosa Plastics: 600,000 metric ton/year plant in Point Comfort, Texas.
  • Williams Energy: 455,000 metric ton/year plant in Alberta, Canada.
  • Enterprise Products Partners (EPP): 750,000 metric tons per year on the Texas Gulf Coast.
  • C3 Petrochemicals: Capacity for a plant in Chocolate Bayou, Texas, has not been disclosed.

via Propylene Prices Roller-Coaster Ride :: My Purchasing Center.

Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website

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