Propylene tight balance situation maintains supply and demand imbalance among regions

Introduction: with the diversified development of olefin raw materials, the diversity of propylene production process and the rich structure of downstream products become more and more obvious. The horizontal and vertical extension of the industrial chain will bring about changes in the imbalance of supply and demand among regions.

Propylene, as an important chemical raw material, has developed rapidly in recent years, and shows the trend of diversified raw materials. In addition, in recent years, with the development of demand side polypropylene, propylene oxide, acrylic acid, acrylonitrile, butyl octanol and other products, the distribution of propylene industry has also expanded rapidly. Due to the huge industrial chain and different regional trade environment, propylene market circulation and downstream raw material procurement have been paid more and more attention.

The tight balance situation is bound to maintain a significant regional change

In 2020, the total capacity of propylene in China will be 44.77 million tons, the output will reach 36.1 million tons, and the total demand will be 40.05 million tons, among which the import volume will decline due to the improvement of domestic self-sufficiency rate. According to the sample statistics, in 2021, the maximum supply of propylene is 46.34 million tons / year, the maximum consumption of downstream derivatives is 45.37 million tons / year, and the theoretical supply-demand gap is 960000 tons / year. Although the theoretical difference between supply and demand is positive, the annual operating load rate of propylene is only about 80% due to the unstable production of some units, and the demand gap still needs to be filled by imports. The tight balance between supply and demand of propylene will remain in the short term.

Figure 1 Comparison of regional supply and demand data of propylene in China in 2021

Remarks: East China does not include Shandong. The supply and demand situation of Shandong Province is calculated separately.

Through the calculation of theoretical supply and demand of propylene and downstream derivatives, it can be seen that there are demand gaps in the domestic market in Shandong and East China, but the theoretical prediction value of East China is significantly less than that of Shandong. In addition, the region with greater supply pressure is South China, which has a surplus supply of propylene due to its insufficient derivatives. Other regions, such as northeast, North China and northwest, are slightly rich in supply, while central and southwest China are in a tight balance.

The balance of supply and demand in different provinces is shown in the figure below

Figure 2 distribution of supply and demand balance of propylene market in China

Note: the difference between supply and demand is calculated as the theoretical data value. Red bubbles represent oversupply and green bubbles represent demand gap.

The gap between Shandong and East China is obvious

Propylene downstream industry chain is rich and diverse, and the production layout is crisscross. With the production of new capacity, the regional supply and demand environment has changed greatly. The following statistics are carried out from polypropylene and chemical derivatives to show the changes of external mining volume in different regions.

From the perspective of polypropylene, the total capacity of PP granules is 28.41 million tons / year, with 78 enterprises, accounting for 58.07% of the downstream consumption of propylene. Because most PP granulation plants are equipped with propylene raw materials, only a small number of enterprises need to import propylene. According to the sample data statistics of Zhuo Chuang information, 71 enterprises have their own propylene raw materials with a production capacity of 26.21 million tons. Among them, 9 enterprises need to import propylene due to insufficient self supply of propylene, with an output of about 650000 tons. Another seven enterprises did not allocate raw material propylene and needed to be imported, involving PP grain production capacity of 1.4 million tons.

Compared with PP particles, the matching ratio of PP powder raw material propylene is obviously lower. The total capacity of PP powder is 5.83 million tons / year, with 67 enterprises, accounting for 12.99% of propylene downstream consumption. From the perspective of derivative PP powder, a total of 26 enterprises have their own propylene raw materials, with a production capacity of 3.24 million tons. Among them, 5 enterprises have insufficient self supply of propylene and need to be imported, with an output of 920000 tons. Another 41 enterprises did not allocate raw material propylene and needed to be imported, involving PP powder production capacity of 2.59 million tons. Detailed analysis of the need for propylene production PP powder enterprises, Shandong, East China is the most concentrated.

Figure 3 regional distribution of propylene production from polypropylene

In terms of the proportion of propylene downstream consumption, except for more than 70% of polypropylene, the other 30% is basically used for the production of chemical derivatives. According to the comprehensive statistics of chemical derivatives, there are 197 enterprises, many of which are equipped with a variety of propylene downstream derivatives at the same time.

Table 1 Statistics on the number of supporting enterprises for other products of different derivatives

Note: the gray area indicates the number of enterprises of the product; the white area indicates the number of other products in the production enterprise of the product at the same time.

By summarizing the data of propylene extracted from downstream derivatives, it is concluded that the total amount of propylene to be extracted from chemical downstream derivatives is 6.13 million tons / year in addition to its own supporting propylene.

Figure 4 regional distribution of propylene production from downstream enterprises of propylene chemical industry