Propylene expansion climbing or facing overcapacity

In 2018, with the production of new units in Northeast Asia, North America and the Middle East, the expansion of propylene industry is at a historical high Rising oil prices and tight supply and demand drove propylene prices to a four-year high In 2019, the new capacity of propylene in the world mainly comes from Northeast Asia, and the new scale has reached a new record With the light-weight of ethylene raw materials, propylene production capacity growth is no longer closely followed by ethylene, and the low sulfur marine fuel policy will lead to the reduction of propylene supply in refineries The propylene industry chain in Northeast Asia continues to expand rapidly, while the Middle East slows down, North America and Western Europe basically stagnate, and the world propylene industry chain will build a new trade balance Due to the differentiation of propylene cost in different regions of the world and the high price of polypropylene, the overall profit of the propylene industry chain in the world has increased slightly and the prosperity has continued China has ushered in the peak of propylene capacity expansion in recent years, and new capacity has been added in all routes, among which, propane dehydrogenation (PDH) and coal to olefin (CTO) have increased significantly with the help of cost advantage capacity, and propylene capacity will exceed the equivalent consumption for the first time, and will face overcapacity Driven by the production of PDH and CTO in eastern China, the capacity expansion rate of propylene in China is at a high level in recent years However, the trade friction between China and the United States has pushed up the cost of PDH raw materials and increased the project variables Due to the improvement of refining capacity of Shandong refining company, the trading volume of propylene in this area is gradually enlarged, and the discourse power of propylene price in Shandong market is expected to further strengthen In 2019, the equivalent consumption of propylene increased steadily, but the growth rate continued to slow down Polypropylene, propylene oxide and acrylonitrile were the three downstream products with rapid growth, and the proportion of structure slightly increased; the proportion of acetone and acrylic acid was the same as that in 2017; the proportion of butanol and octanol slightly decreased In terms of the world propylene price creating new high capacity last year, the world propylene capacity experienced rapid expansion from 2014 to 2016 and slowed down briefly in 2017, then accelerated again in 2018 In 2018, Asia is rich in propylene raw materials, and almost all production lines have new capacity, mainly from China, South Korea, India, Malaysia, Vietnam, etc., ranking first in the world In North America, the process of ethylene feedstock lightening is accelerated, and the new capacity of propylene from cracking unit is less The Middle East is rich in light hydrocarbon resources, and the new production capacity mainly comes from naphtha cracking unit, which accounts for more than 50% of the total capacity of the region Western Europe is also dominated by cracking propylene, while the catalytic cracking capacity has hardly increased In terms of consumption, the growth rate of propylene consumption in 2018 is higher than that in the previous two years, and the new consumption is at a historical high level Emerging economies are driving the growth of propylene consumption Global propylene consumption is mainly used to produce polypropylene, propylene oxide, acrylonitrile, acrylic acid, butyl octanol, isopropyl * and other products In terms of the proportion of downstream product structure, polypropylene is the downstream derivative of propylene *, accounting for 65.7% of the global propylene consumption in 2018, an increase of 0.7 percentage points compared with 2017, while the proportion of propylene oxide, acrylonitrile, acetone, acrylic acid decreased by 0.1 percentage points, and the proportion of butyl octanol decreased by 0.2 percentage points The growth of polypropylene consumption is mainly driven by the rapid economic development of China dominated Asia Pacific region and many emerging economies in Central Europe and the Middle East Among them, the Asia Pacific region is driven by internal demand, and the Middle East region is driven by plastic exports Polypropylene consumption in mature economies such as North America and Western Europe grew steadily, but at a relatively slow rate In terms of the new consumption of polypropylene in 2018, 2.28 million tons in Northeast Asia, 520000 tons in India and Pakistan, 330000 tons in Southeast Asia and less than 200000 tons in other areas Affected by crude oil price, supply and downstream consumption, propylene reached a four-year high in 2018 In 2018, the price of crude oil rose, the supply of North America and Northeast Asia was tight, and the global demand for polypropylene and other factors boosted the price of propylene Only a set of 750000 T / a PDH propylene plant is put into operation in the United States, and the growth rate of propylene consumption is faster than that of supply, resulting in tight supply in North America The newly increased capacity in Northeast Asia is mainly in China, but most of the units are put into operation at the end of the year, and the output has not been released In addition, with the overhaul of Zhenhai Refining and Chemical Co., Ltd and Fujian Refining and Chemical Co., Ltd in China, the strong downstream demand has increased the propylene gap China's Propylene sources are more abundant in 2018 China's propylene production capacity is 34.83 million tons / year, with a production of 31.4 million tons, an increase of 5.5% and 9.2% respectively compared with 2017 The equivalent consumption is 40.1 million tons, an increase of 7% compared with the previous year In the new production capacity of China in the past year, propylene non-traditional routes have increased significantly Because of its cost advantage, PDH obviously ushered in the peak of investment, and the proportion of device structure increased to 18% In recent years, China's Propylene sources are more abundant, and the units of FCC to propylene, naphtha cracking to propylene, PDH, methanol to olefin (MTO), CTO and other routes have been put into operation In 2018, the new capacity of propylene will be 1.8 million tons / year Due to the large increase of methanol price in recent two years, some methanol to propylene (MTP) units are in a long-term shutdown state, and the MTO units in the East have to reduce the operating rate, and the MTO projects such as Jilin Cornell have been put off production There is no new MTO capacity in 2017-2018 In terms of the proportion of unit structure, PDH and CTO increased to 18% and 14% respectively, while the proportion of traditional refining and naphtha routes decreased to about 57% At the same time, although the growth rate of propylene equivalent consumption has slowed down year by year since 2015, the annual growth rate of about 7% in 2018 is higher than that of GDP, which is in a high-speed growth period The downstream demand for propylene is mainly polypropylene, which accounts for 67% of the total demand for propylene, 1.3 percentage points higher than the global demand The production of new units for non naphtha routes, such as coal chemical industry, has greatly increased the domestic polypropylene production capacity In 2018, the net production capacity increased by 1.25 million tons / year, to 24.73 million tons / year, and the production reached 22 million tons In 2018, the demand for polypropylene was 26.4 million tons, with an annual growth rate of more than 8% Driven by the downstream demand, the annual consumption of propylene oxide, acrylonitrile, butanol and octanol also maintained a high growth rate of more than 6%, which can be affected by the increasingly strict environmental protection The annual consumption of acetone and acrylic acid increased slowly, accounting for 2% - 5% It should be noted that the discourse power of pricing for Shandong refining propylene is further strengthened East China propylene market references Sinopec's monthly quotation, while Shandong propylene market, due to its large volume and frequent transactions, has become a benchmark price for propylene transactions in North China, northwest, northeast and other regions Generally, Shandong propylene price and freight pricing method is adopted China's import of propylene mainly comes from South Korea, Japan and Taiwan The import price is dominated by these countries and regions Since the opening of China's crude oil import right and crude oil import use right in 2015, the catalytic cracking capacity of Shandong refining Co., Ltd has increased rapidly, and the propylene capacity has increased accordingly 70% - 80% of the propylene sold by Shandong refining Co., Ltd is sold to the outside world With the increase of the operating rate of the refining, the volume of propylene sold continues to increase, which further strengthens the pricing voice in Shandong market The domestic propylene supply pattern changes in 2019 It is estimated that the propylene capacity will reach 41.73 million tons / year in 2019, an increase of more than 19% over the previous year; the output will reach 34 million tons, and the equivalent consumption will reach 42.1 million tons, an increase of 8.3% and 5% over the previous year, respectively, which will soon face overcapacity China's Propylene industry has experienced the peak of capacity expansion from 2014 to 2016, and after a short fall in 2017, 2019 will usher in a record high of new propylene production capacity in recent years, and it is expected to add 5.86 million tons / year of production capacity Propylene production line continues to diversify and PDH line leads in new capacity However, the growth rate of propylene demand is slower than that of production capacity, and the self-sufficiency rate will be improved again The domestic propylene capacity will exceed the equivalent consumption for the first time, and the situation of overcapacity will be faced In addition to the new capacity of PDH route, the coal to olefin (CTO) route is also picking up, and its new capacity in 2019 is at a higher level over the years In recent years, with the rise of international crude oil price, China's CTO has developed vigorously, especially in the western region, which is rich in coal resources Now, there are four CTO industrial bases in Ordos, Yulin, Ningdong, Ningxia and Zhundong, Xinjiang By the end of 2018, the capacity of CTO device is about 4.8 million tons / year In 2019, with the commissioning of three projects of Jiutai energy, China an united coal chemical industry and Ningxia Baofeng, the new propylene production capacity will be 900000 tons / year The increase of crude oil price and the abundance of propane resources lead to the rearrangement of the cost of various propylene routes and the obvious enhancement of the advantage of coal to olefin In 2018, the cost of naphtha route is much higher than that of CTO, with a difference of about 1800 yuan / ton olefin With the increase of crude oil price and methanol price, it is expected that the cost of each route will be rearranged in 2019: CTO in the West < PDH in the East < MTO in the East; the cost difference between naphtha cracking and CTO will exceed 2000 yuan / ton olefin At the same time, the new propylene production capacity of new refining and chemical enterprises can not be ignored Under the stimulation of a series of reform dividends, such as crude oil import liberalization and decentralization of approval authority, emerging refining and chemical enterprises have obtained capital operations such as bond financing and equity financing through banks, opening up capital channels In 2019, large-scale integrated refining and chemical projects such as Zhejiang Petrochemical and Baolai group will be put into operation in succession, with a total capacity of 1.9 million tons / year of propylene expected to be released However, it should be noted that the growth rate of domestic propylene demand continues to be lower than that of supply In 2019, propylene equivalent consumption increased steadily, but the growth continued to slow down to 5% Downstream development trends of polypropylene: express delivery, takeout and automobile lightweight are still the driving force of demand 2018 is the peak year of polypropylene capacity expansion The capacity of polypropylene is 24.73 million tons / year, the new capacity is 1.25 million tons / year, and the output is 22 million tons The new apparent consumption of polypropylene is at a historical high, with an annual growth rate of 8.7%, and the annual consumption is about 26.4 million tons Compared with developed countries, China's polypropylene consumption, low-end products account for a relatively high proportion, such as woven products, general injection molding products and general packaging, especially the proportion of woven products is significantly higher than that of European and American countries and regions In the past three years, domestic polypropylene production technology has been greatly developed in the field of special materials A series of homopolymer pipe materials and medical materials have been developed, reducing the dependence on some high-end imported materials The main factors driving the growth of polypropylene consumption are as follows: in 2018, the scale of food and beverage delivery market continued to grow at an annual growth rate of 33%; the development of express delivery industry and the upgrading of plastic packaging expanded the application field of materials and supported the rapid growth of packaging industry; the demand for injection molding special materials in automobile lightweight, home appliances and other industries increased significantly In 2019, the capacity expansion of polypropylene will be further accelerated, but there is still a large gap In 2019, the polypropylene production capacity will increase by 4.85 million tons / year to 29.58 million tons / year, mainly from Zhejiang Petrochemical (900000 tons / year), Liaoning Baolai (600000 tons / year) and other enterprises, but most of the projects will be put into production in the fourth quarter, with limited contribution to this year's supply Propylene oxide: after rapid expansion, the supply main body increased In 2018, the newly increased capacity of propylene oxide in China was 500000 tons / year, to 3.91 million tons / year, but the actual newly increased production supply was only 175000 tons, to 2.9 million tons The apparent consumption of propylene oxide was 3.16 million tons, an increase of about 7% over the previous year, with a slight increase over the previous year The expansion speed of propylene oxide industry slows down in 2019 Due to the high price of propylene oxide in China, a lot of investment has been attracted At the same time, with the promotion of propylene to propylene oxide technology in China, many private enterprises are also actively expanding the capacity of propylene oxide The increase of suppliers will play an important role in stabilizing the price fluctuation of domestic propylene oxide Market Downstream consumption is expected to show few bright spots The domestic polyether industry as a whole is in a situation of excess, especially the excess pressure in the soft foam polyether market * However, the price of propylene oxide in China is high, and the competitiveness of polyether in China is weak, which is difficult