PDH Market to Warm up with Profit Improvement
Recently, PDH and downstream markets warmed up, as propane import costs fluctuated downward from April 2022 and PO, acrylonitrile and acrylic acid prices rebounded from August.
China’s propane import costs waned.
As seen from the chart above, with the international crude oil prices decline, the international propane prices moved downward. Accordingly, China’s propane import cost fluctuated downward. As of October 12, the average propane import cost declined by RMB 181.33/mt or 3.53% from September.
Major downstream products’ prices bottomed out.
As seen from the chart above, prices of propylene downstream products declined at first and rebounded from August. Therein, PO prices increased to around RMB 11,000/mt at the end of September, and acrylonitrile prices surpassed RMB 10,000/mt. At the same time, acrylic acid prices rose to RMB 8,500/mt. Backed by the increment in propylene downstream products, the demand for propylene improved.
China’s PDH capacity will probably see rapid expansion in 2022.
Although China’s PDH market strengthens somewhat, it may be tough for China’s PDH unit profits to reach relatively high levels in the short term. However, it is predicted that China’s PDH capacity will expand rapidly. As of the end of September, five newly added PDH units came on stream, and the total newly added capacity reached 2,100kt/a. In Q4, 2022, seven newly added PDH units will probably be put into use. In 2022, it is estimated that China’s newly added PDH capacity will reach 6,300kt/a, up about 62% from 2021.
Fairish propylene downstream profits gave wings to propylene demand.
Propylene Downstream Product Gross Profit Change
According to SCI’s data, profits from downstream chemical product, such as acetone, 2-EH, etc., production in September rose M-O-M, as products’ prices went up with improvements in supply and demand fundamentals.
In the short term, PDH unit profits may perform well in the wake of low costs, supporting PDH unit operating rate. Moreover, China’s PDH capacity will probably further expand, lifting the overall propylene supply. At the same time, the overall propylene demand is likely to strengthen with the downstream capacity expansion and profit improvement.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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