In 2013, China alone processed more than 18 mln tons of propylene. Thus, propylene, besides ethylene, is the most important petrochemical feedstock in the Chinese chemical industry. 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 and acrylic acid. A study by Ceresana shows in detail where the propylene manufactured will be processed in the future.
Given limited crude oil resources, Chinese manufacturers of propylene are dependent on imports. A large share of propylene output occurs as either by-product of ethylene in steam crackers or catalytic cracking in refineries. Both processes predominantly use crude oil. Output of non-crude oil based propylene products is to be increased considerably in the future. In order to achieve this goal, utilization of CTO technology (coal to olefins) and production of propylene by dehydration of propane are to be expanded. Several production sites based on these technologies are scheduled to become operational in upcoming years. Polypropylene (PP) will remain the by far largest sales market for propylene. According to analysis, Chinese demand for this plastic will increase by more than 5% until 2021. Polypropylene is one of the most versatile packaging materials. Other applications include fibers, textiles, vehicle parts, electrical devices and household goods. Chinese propylene demand in the production of cumene is expected to rise at double-digit growth rates in the next eight years. In China, cumene is almost exclusively used to produce phenol and acetone. Important applications for phenol are phenolic resins and bisphenol A. Phenolic resins are used for, e.g., rigid foam boards in building insulation or for printed circuit boards in the electrical industry. Bisphenol A is an important monomer for the production of high-quality polymers such as polycarbonate and epoxy resin. More than 90% of Chinese demand for bisphenol A originates in the manufacturing of these products.
The development of the Chinese acrylonitrile market is highly dependent on the applications acrylonitrile-butadiene-styrene (ABS) and acrylic fibers. Given its manifold applications in the growth sectors automotive, electrical and electronic as well as construction, demand for ABS is increasing dynamically. The market for acrylic fibers on the other hand does not grow notably, partly due to the lagging export business in the sector chemical fibers. In the future, demand for acrylic fibers will rise corresponding to the overall recovery of the global economy.
The importance of propylene as major feedstock in the petrochemical industry can be seen in the immense demand volume. In 2013, the USA single-handedly consumed more than 14 mln tons of propylene. 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. The markets for these derivatives are analyzed in the Ceresana study.
As a result of the shale gas boom, ethane has become the dominant feedstock in 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 in the USA. The change from naphtha based crackers to ethane based production reduced the supply of propylene and increased volatility of prices. In order to counteract the supply deficit, an increasing amount of propylene is to be manufactured from propane in the USA. Dehydrogenation of propane is a way to produce a high amount of propylene directly. The share of propane in propylene production is expected to rise to more than a third in 2021. Manufacturers are profiting from increasing propane supply in the USA.
Propylene is mainly processed into polypropylene. According to analysis, US demand for this plastic will increase by about 2% until 2021. The standard plastic polypropylene is one of the most versatile packaging materials. Other applications include fibers, textiles, vehicle parts, electrical devices and household goods. 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.
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.