Rise in US propylene supply to fail to meet global PP demand
The US is positioned to capitalise on the polypropylene (PP) shortages as the demand increases manifold in other markets, particularly Asia, according to a Platts report
BS B2B Bureau B2B Connect | New York, USA
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Polypropylene, commonly known as PP or polypropene, is a plastic that has the widest variety of applications, including packaging, automotive components, stationary, furniture, reusable containers, disposable cutlery, toys, textiles, domestic appliance and banknotes. The price movements of PP resins directly impact raw material costs for the makers of ‘everyday items’.
Jim Foster, Editorial Director of Petrochemical Analysis at Platts, said, “Shale gas exploration has given the US an opportunity to enter the on-purpose propylene market in a big way. While much of the propane dehydrogenation (PDH) announcements were designed to offset the lost propylene production from refineries and crackers that have switched to the lighter ethane feedstock, we will face a potential oversupply of propylene in the near future.”
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At the same time, there are 16 PDH plants being planned in China, which would produce more than eight million mt of the feedstock propylene annually. Of these, eight have already announced they will be using propane sourced from the US.
Foster added, “The US is positioned to capitalise on the PP shortages in two ways. US-produced plastic, made from inexpensive shale-based propane, can be exported globally. Or, if other regions - particularly Asia - prefer to produce domestically, US-produced Natural Gas Liquids (NGLs) will be exported to feed those units.”
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First Published: Aug 14 2014 | 5:24 PM IST