Propylene Upstream and Downstream Unit Status

Propylene Upstream and Downstream Unit Status

 Highlights

In March and April, the propylene upstream and downstream units fluctuated frequently, and the supply and demand became the key factor determining the market trend. In recent days, prices of PP futures and spot goods continuously went down, and the fluctuation in downstream units increased. Thus, the demand for propylene was soft, and the market trading weakened.

In recent two weeks, the unit fluctuation at propylene producers was limited, and the market supply was relatively stable. The inventory at refineries could be controlled, and the sales pressure on most refineries was low. Thus, the propylene market price moved sideways. In H2 April, previous overhaul producers will successively restart, and some producers which have the maintenance plan may experience the maintenance. The market supply pressure may inched up, and players should focus on the changes in the market supply.

Firstly, in recent days, prices of PP futures and spot goods dropped for days, and the trading atmosphere was insipid. Players held bearish sentiment, and the demand for propylene was sluggish. However, the profits of PP remained favorable, and the PP powder producers in Shandong maintained at high operating loads. Besides, the gas separation unit at Shandong Shouguang Luqing Petrochemical was shut down, and the propylene for captive use decreased. The demand for propylene from PP powder producers were passable, and producers mostly purchased on a need-to basis. Secondly, other propylene downstream plants ran unstably. Shandong Jianlan Chemical improved the operating loads of its oxo-alcohols unit, and it did not need to purchase the feedstock outside. All units at Lihuayi Group would experience the maintenance soon, and the company purchased less propylene outside last week. The operating load of PO unit at Shandong Sanyue dropped to 80% on April 12 and did not recover. Shandong Xinyue Chemical shut down its PO unit for maintenance and did not need to purchase the propylene outside temporarily. The 30kt/a acrylic acid unit at the old plant of Shandong Kaitai Petrochemical was shut dwon for maintenance from last week, and the acrylic acid unit at Shandong Hongxin Chemical did not restart.

As a whole, except for the bearish sentiment, the frequent fluctuation in the propylene downstream units did lead to the weak demand for propylene. 

But the oxo-alcohols unit at Bluesail Group has been restarted, and that at Shandong Jianlan Chemical will also restart. The acrylic acid units at Shandong Hongxin Chemical and the old plant of Shandong Kaitai Petrochemical will successively resume the production. What’s more,. The PP unit at Sinopec Qilu Petrochemical will take the scheduled turnarounds. In general, before the end of April, the propylene market supply in Shandong will inch up, and the demand was average. SCI predicts that the propylene market price will continue to move sideways at lows, and the fluctuation will be limited.

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