PP resin is made from propylene and propylene is the second most produced building block in the petrochemical industry. The price of propylene is susceptible to the pricing of the petrochemical industry. The trends that effect petrochemical industry pricing are the growth of economies around the world along with discoveries on new oil & gas fields.
Propylene is produced by ethylene steam crackers. The propylene is co-product of steam cracking and the quantity produced depends on the nature of feedstock. If the feedstock is light like ethane then very less propylene is produced but when the feedstock becomes heavier to propane to butane and then naphtha the quantity of propylene co-produce is more.
Now the United States has seen low-cost ethane since 2008, as a result, there a shift in propylene production. The two major shifts are:
The existing crackers are now are working with a very light feedstock which in turn leaves with lesser and lesser propylene production.
As therein increase in availability of lightweight feedstock the production of steam cracker designed to crack only lightweight feedstock producing less propylene.
The availability of low-cost ethane along with the production of ethylene steam cracker with the only cracking ability of lightweight feedstock has reduced the production of propylene. These factors are impacting the pricing of PP resin.
But as and when the oil price decline sharply the advantage of cracking low weight feedstock diminish and cracking trend shift towards heavier feedstock. This leads to more production of propylene which in times lowers the prices of pp resin.READ MORE
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