Asia propylene market softens on easing supply

The Asian propylene market has been moving south in the past two weeks as supply become loosened with the start up of some crackers within the region. In fact, compared to mid of March – when propylene prices based on FOB Korea term reached the level last seen in Sept 2015; it has lost $20/t in value to reach $650/t. Market sources attribute these loses to the ease in regional supply.

It is reported that Korea’s SK Advance has successfully commenced commercial production at its new 600,000 tpa propane dehydrogenation (PDH) unit in Ulsan and started to export its output. Meanwhile, in Southeast Asia, Thailand’s IRPC reportedly achieved on-spec propylene output at its deep catalytic cracking (DCC) unit and might be able to ship the first cargoes by early April 2016. The unit is designed to produce 320,00 tpa of propylene monomer. Indonesia’s Chandra Asri has also reach 80% capacity at its newly expanded naphtha cracker and might reach 85% by end of this week. The cracker was unexpectedly shutdown in late Feb 2016 due to some technical issues and has been operating at 50-60% capacity till early March. The cracker has an annual output of 450,000 tons of propylene.

Looking forward, market is expecting further downward movement as more propylene plants in China to come online during April and May period; however, in the near term market is expecting a relatively stable trend.

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