Houston (ICIS)-The expectation that the raw material propylene supply will remain healthy may continue to exert downward pressure on the US polyether polyol market, leading to this year's International Petrochemical Conference (IPC).
The U.S. polyether polyol market is structurally long, and prices tend to lag behind the direction of changes in the cost of propylene raw materials for a month or two.
The supply of propylene has increased in recent months, and due to the increase in steam cracking capacity and the increase in operating rates of propane dehydrogenation (PDH) plants, it is expected to remain high for most of this year.
Propylene is a by-product of the steam cracking process, and the main product is ethylene.
Most of the new US crackers are designed to use lighter feedstocks and produce fewer propylene by-products, although the large scale of the US crackers is expected to increase the supply of propylene.
The PDH plant is a dedicated propylene plant and is being built in the United States and Canada to increase the supply of propylene and maintain a sufficient supply of propylene derivative plants.
Pressured producer profit margins may limit the price decline of polyether polyols because producers failed to fully reflect the 2018 propylene cost increase in their final product prices.
The downstream demand for polyurethane systems has been strong in the past few years, but as the global economy sends signals, the GDP growth of many major economies in the world has slowed down, so there are some signs of slowing down.
Automotive demand in Asia, Europe and the United States has been slowing down, while demand in the North American furniture and bedding industries has been disappointing.
Polyurethane systems have a wide range of applications, some of the main consumer industries are automobiles, furniture and bedding, construction and electrical appliances.
Polyol and isocyanate react to produce polyurethane foam.
Major producers of polyether polyols in the United States include Covestro, Dow Chemical and BASF.
IPC is hosted by American Fuel and Petrochemical Manufacturers (AFPM) and will be held in San Antonio, Texas from March 24th to 26th.
Zachary Moore's Focus Article
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