Propylene prices in Asia heading for a crash?

Propylene prices in Asia seem headed for "a crash" a result of an increase in spot supplies by around 20,000 ton/month as per ICIS. Huge surpluses are expected to flood the markets with the start up of facilities in Asia, easing the tight supplies in Asia that have sustained the rally in polyolefin prices. Shell Chemicals’ Singapore cracker, in the process of starting up, will have a surplus 440,000 tpa of C3s- as the oil-to-chemicals major failed to attract propylene derivatives investors. Substantial surplus will be available from the Map Ta Phut complex when the Dow Chemical/Siam Cement cracker is on-stream shortly. This will be coupled with 150,000 tpa from Vietnam’s PetroVietnam fluid catalytic cracker and 100,000-150,000 tpa of additional supply from Saudi Arabia. Ethylene markets will also become longer, with new merchant-market supply including 115,000 tpa from Shell in Singapore. However, the total surpluses don't look as if they will be as disruptive as those in C3s. An increased supply of PE and PP in the regions with the start up of new facilities will combine with weaker support from feedstocks to bring about the long-awaited trough in PP pricing. PP producers might benefit. They should have greater ability to discount as they battle for market share against their polyethylene (PE) competitors. More liquefied petroleum gas (LPG) cracking and changes in cracker severity will probably be methods producers use to reduce the propylene surplus.
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