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VOLUME XXI
September 14, 2023
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August 24, 2020
US PDH margins reach 10-month high amid reduced propylene supply
Author: Michael Sims
2020/08/21
HOUSTON (ICIS)–US propane hydrogenation (PDH) margins have reached 10-month highs as production issues have elevated polymer-grade propylene (PGP) prices.
PDH margins have more than quadrupled since early June after plunging 72% in March-May.
US PDH margins
Source: ICIS Margin Analytics
PDH margins were compressed following the onset of the coronavirus crisis in the US as containment efforts curbed demand for most propylene derivatives.
This effect was amplified by rising feedstock natural gas liquids (NGLs) prices caused by concerns about reduced oil and gas production.
The result has been a rapid narrowing, followed by widening, of the US propane-propylene price spread.
NGLs have outpaced the recovery in crude prices, which has been attributed to speculation among market participants that less oil and gas production would tighten NGL supply.
Production data on NGLs has not supported these concerns, and the growth rate of propane prices has slowed accordingly.
The US chemical industry relies predominantly on NGLs including ethane, propane and butane as feedstock.
In addition to rising feedstock costs, production issues have curbed PGP supply, pressuring spot prices to a one-year high.
US propylene production in June decreased by 6.9% month on month, according to Advisian.
Margin outlook
Once the spate of outages is resolved, the outlook for US on-purpose propylene margins ultimately will depend on market confidence in feedstock supply and on the world’s success at containing the coronavirus.
While NGLs supply is not expected to fall short in the near-to-medium term, the propylene demand recovery will be gradual, which could pressure PDH margins.
Greater heating demand for propane during the northern hemisphere winter will also pressure PDH feedstock costs and could contribute to margin compression.
“PDH margins have recovered nicely over the past few months with the recent increase in propylene prices. However, they are expected to decrease into the first quarter of 2021 as propane prices rise faster than propylene with increasing propane demand during the winter heating season,” said Kimberly Haberkost, director of olefins at Chemical Data.
The main outlet for propylene is as a feedstock for polypropylene (PP). Propylene is also used to produce acrylonitrile (ACN), propylene oxide (PO), a number of alcohols, cumene and acrylic acid.
Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.
Focus article by Michael Sims
August 21, 2020
August 21, 2020
Tosoh to Increase Prices for Millionate MDI Grades
Tosoh Specialty Chemicals USA, Inc. is increasing its prices for Millionate MDI Grades in North America. Effective September 1, 2020 or as contract terms allow, TSCU will increase the prices of MDI grades by $0.20/kg.
Millionate MDI is widely used in the production of rigid, semi-rigid, and integral skin foams, as well as coatings, adhesives and elastomers.
August 21, 2020
August 21, 2020
Tosoh to Increase Prices for Millionate MDI Grades
Tosoh Specialty Chemicals USA, Inc. is increasing its prices for Millionate MDI Grades in North America. Effective September 1, 2020 or as contract terms allow, TSCU will increase the prices of MDI grades by $0.20/kg.
Millionate MDI is widely used in the production of rigid, semi-rigid, and integral skin foams, as well as coatings, adhesives and elastomers.
August 20, 2020
Wanhua Chemical H1 profit decreased amid pandemic August 20/2020 MOSCOW (MRC) — China’s Wanhua Chemical posted a 49.56% decrease in net profits in the first half of the year, as sales and prices both took a hit from the coronavirus pandemic, the company said.
Slump in oil prices also dampened demand and prices of its products.
Prices of pure methylene diphenyl diisocyanate (MDI), its major product, decreased to CNY15,800-CNY18,700 in the first half year from CNY23,700-CNY27,200 in the same period of 2019.
Prices of petrochemical products the company makes also recorded a double-digit drop.
For the second half year, the company said it would adjust its sales strategies more actively based on market conditions.
The company targets to bring on stream its 1m tonne/year cracker at Yantai later this year.
As MRC informed earlier, ADNOC Logistics and Services (ADNOC L&S), a subsidiary of the Abu Dhabi National Oil Company (ADNOC) had formed a shipping joint venture with Wanhua Chemical Group. The new company, AW Shipping Limited, is incorporated in Abu Dhabi Global Market (ADGM), a statement by ADNOC said.
August 20, 2020
Wanhua Chemical H1 profit decreased amid pandemic August 20/2020 MOSCOW (MRC) — China’s Wanhua Chemical posted a 49.56% decrease in net profits in the first half of the year, as sales and prices both took a hit from the coronavirus pandemic, the company said.
Slump in oil prices also dampened demand and prices of its products.
Prices of pure methylene diphenyl diisocyanate (MDI), its major product, decreased to CNY15,800-CNY18,700 in the first half year from CNY23,700-CNY27,200 in the same period of 2019.
Prices of petrochemical products the company makes also recorded a double-digit drop.
For the second half year, the company said it would adjust its sales strategies more actively based on market conditions.
The company targets to bring on stream its 1m tonne/year cracker at Yantai later this year.
As MRC informed earlier, ADNOC Logistics and Services (ADNOC L&S), a subsidiary of the Abu Dhabi National Oil Company (ADNOC) had formed a shipping joint venture with Wanhua Chemical Group. The new company, AW Shipping Limited, is incorporated in Abu Dhabi Global Market (ADGM), a statement by ADNOC said.
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