By Ben DuBose
HOUSTON -- A stated goal to reduce exposure to other markets
will drive an enormous increase in propylene and propylene
derivatives capacity in China by 2020, an executive with IHS
Chemical said Thursday.
Matthew Thoelke, director for olefins and derivatives in
Europe, the Middle East and Africa, says China holds the key to
the future propylene market because of its status as the
worlds largest importer.
The Northeast Asian, Taiwanese, South Korean and
Japanese petrochemical industries have grown
up on the back of Chinese demand, Mr. Thoelke said at the
IHS World Petrochemical Conference.
However, evolving market conditions are helping to spur a
wave of new investment that could put China closer to
self-sufficiency by the end of the decade.
By 2020, Mr. Thoelke predicts that over a third of expected
Chinese production will come from new propane dehydrogenation
(PDH) and methanol-to-olefins complexes. Both categories were
almost non-existent as recently as 2011.
The dominance of methanol-to-olefins capacity, which
will be primarily sourced from coal-based methanol, reflects
the Chinese push for self-sufficiency, Mr. Thoelke said.
Chinas on-purpose investments will reduce import
After several million tons of new capacity start up between
2014 and 2016, China is expected to account for over 40% of
global on-purpose propylene capacity -- up from around 5% as
recently as 2010.
The trend toward cracking lighter feedstocks, such as ethane, in North
America and the Middle East may also contribute. With limited
by-product propylene production in crackers, supply isnt
keeping up with demand in some locations, which could lead to
higher global pricing patterns.
As a result, China is planning to take supply into its own
hands with the latest wave of projects. But while it will
narrow the gap by 2020, Mr. Thoelke predicts China
will remain a significant propylene importer for the
Primarily in the form of derivatives, they will still
remain in the import market, even after the assumed growth in
production," he said.
The conference continues through Thursday at the Hilton
Americas in downtown Houston.