SINGAPORE (ICIS)–Propylene supply has tightened in the northeast Asian market this week following outages at two major propane dehydrogenation (PDH) units in China, industry sources said on Monday.
The two PDH units have a combined propylene capacity of 1.2m tonnes/year.
The tightened supply may provide some support to prices, market sources said.
At midday, propylene discussions were mainly heard at $750-760/tonne CFR (cost and freight) NE (northeast) Asia for June-arrival cargoes.
Wanhua Chemical’s 600,000 PDH plant at Yantai in Shandong province was shut down on 15 May because of technical issues, market sources said.
Prior to shutdown, the unit was running at 60-70% of capacity.
Meanwhile, Tianjin Bohai Chemicals’ PDH unit with the same 600,000 tonne/year propylene capacity had some compressor issue that shut the unit down on Sunday, with no definite restart date, a source close to the company said.
A prolonged shutdown may affect the operating rates of its downstream 450,000 tonne/year oxo-alcohols unit and 150,000 tonne/year propylene oxide unit, the source said.
The Tianjin PDH unit was running at 105% of capacity prior to shutdown.
Top image: Propylene goes into the manufacture of polypropylene, which is used in food packaging. (Source: PhotoAlto/REX/Shutterstock)
Additional reporting by Pearl Bantillo