With the recent production of new projects in the propylene industry, its capacity will usher in a period of concentrated explosion. It is expected that the new production capacity of propylene in the "14th Five-Year Plan" will reach 23.4 million tons/year, and the total production capacity will reach 68.58 million tons/year. It is worth noting that propane dehydrogenation will become a hot investment spot in the propylene industry.

The scope of application to expand the demand continues to rise

The global annual production capacity of propylene has exceeded 130 million tons, the demand is about 106 million tons. China's demand accounts for about 30% of the world. With the continuous upgrading of China's consumption structure, the demand for various types of propylene deeply processed products will continue to grow. Among them, the largest amount of propylene is the polypropylene industry, accounting for about 68%.

At present, the flagging terminal demand has brought greater pressure to the upstream and downstream product markets of propylene. In order to stabilize the market, propylene production enterprises on the one hand choose to sign a long contract with downstream enterprises to ensure the stability of supply and sales; On the other hand, extend the downstream industry chain to improve competitiveness.

It is worth noting that in recent years, due to the good development of non-woven fabrics, automotive industry and plastic packaging industry, it has led to the rapid growth of polypropylene demand. Propylene is a very important organic chemical raw material, the application field is very broad. With the rapid development of downstream industries, especially the high-speed construction of polypropylene plants, China's propylene demand will continue to grow at a high speed.

Continuous release of capacity facing excess risk

China's propylene industry experienced a peak in capacity expansion from 2014 to 2016, after a brief decline in 2017, the new capacity in 2019 hit a record high, reaching 5.86 million tons/year. With the production of new projects, it is expected that China's annual propylene capacity will reach 52 million tons by 2023. But propylene demand growth is slower than capacity growth, or it faces the risk of overcapacity.

Northeast Chemical sales Liaoxi branch economist Zhang Xiaofui believes that the future propylene and downstream new production capacity, and most of them are integrated devices, regional concentration is strong. Propene and downstream intention of new production capacity in the eastern coastal areas. In terms of propane dehydrogenation, Zhejiang satellite, Donghua Energy, Dongguan Juzhengyuan and other concentrated in Jiangsu, Zhejiang, Guangdong and other places, the supporting downstream is basically polypropylene pellets, there are also a small number of chemical downstream products such as acrylic acid and so on.

In the integration of refining and chemical, Dalian Hengli, Zhejiang Petrochemical, Rongsheng Refining and chemical, Zhongke refining and Gulei Petrochemical are also concentrated in Liaoning, Zhejiang, Jiangsu, Guangdong and Fujian and other places, supporting the downstream is basically polypropylene pellets. However, the downstream products of chemical industry are relatively more, such as propylene oxide, acrylonitrile and acetone. It can be seen that the new capacity of propylene and downstream is developing in the direction of scale, and the market competition will be more fierce.

Propane dehydrogenation process into an investment tuyere

Because the propane dehydrogenation process has the advantages of single raw material, short process, high yield and low investment cost, it has become the main direction of propylene expansion.

Polaris hydrogen energy network chemical experts said that in recent years, the proportion of propane dehydrogenation technology in the total production capacity of propylene has increased year by year, and the profit of propane dehydrogenation has been in a high position.

In the case of continuous improvement in the profit situation, China set off a new round of propane dehydrogenation investment boom. With the completion and operation of propane dehydrogenation projects such as Meide-Petrochemical, Zhejiang Petrochemical and Donghua Energy (Ningbo), and the construction of a number of projects such as Formosa Plastics (Ningbo), Tianhong Chemical and Guangxi Huayi, it is expected that about 7.9 million tons/year of propane dehydrogenation capacity will be released from 2020 to 2024. It is expected that by the end of 2024, China's annual propane dehydrogenation/mixed paraffin dehydrogenation capacity will reach about 14 million tons, accounting for 26% of the total propylene production capacity.

Industry insiders believe that from the supply point of view, during the "14th Five-Year Plan" period, propylene production capacity will continue to expand, and the industrial chain will continue to develop in scale and upstream and downstream integration. Propane dehydrogenation production process or will become a hot spot of investment in the propylene industry, is expected to become the second largest propylene production route at the end of the "14th Five-Year Plan".

During the "14th Five-Year Plan" period, China's propylene industry capacity continued to expand, the industrial chain to scale, upstream and downstream integration development. Propylene oxide as an important downstream chemical raw material of propylene, in recent years, under the two-wheel drive of policy and market, the high boom track of the industry accelerated the outbreak. According to statistics, the new annual production capacity of propylene oxide in 2022-2025 will exceed 5 million tons, with the continuous release of new production capacity, supply continues to grow, and the industrial supply and demand are shifting from supply to demand balance, but the expansion of production capacity has not stopped. In the future, enterprises with forward-looking layout in integration and new processes and environmental performance will gain more market opportunities.