U.S. PDH plant operators were pretty happy in the first quarter of this year as margins shot up due to several unplanned outages mainly at Enterprise’s units in Mont Belvieu, TX. But the party didn’t last very long as margins have declined sharply recently to the lowest level since early December. As shown on the left-hand chart below, the propylene-propane spread has declined by 41% to ~22 c/lb as of April 1 since peaking at nearly 38 c/lb in early March. And the decline in PDH plant margins has been entirely driven by lower polymer grade propylene (PGP) prices. As shown on the right-hand chart below, Gulf Coast PGP prices (green line) dropped to 45.5 c/lb on April 1, down 15 c/lb, or 25%, from early March while Mont Belvieu propane prices (yellow line) weakened by ~3% over the same period.
Featured Articles
- Analyst Insight
U.S. Propylene Margins Under Pressure; Enterprise PDH-2 Start-Up Looms
U.S. PDH propylene margins peaked at 49 c/lb in early March as polymer grade propylene prices (PGP) soared to over 70 c/lb. PGP prices have since crashed to around 30 c/lb pulling PDH plant margins down to only 14 c/lb.
- Analyst Insight
U.S. Propylene Margins Remain Under Pressure As Propane Prices Rally
PDH plant margins peaked at almost 50 c/lb in March but have declined sharply since that time and currently sit at only about 10 c/lb.
- Blog
Son of a PDH Man? – The Propylene Plants Are Coming!
Starting at the end of 2015 six new North American propane dehydrogenation (PDH) plants are expected to come online. These new plants will have the capacity to convert up to 170 Mb/d of propane into much more valuable propylene. If all the plants are built, these new supplies of propylene should more than replace declining output from olefin crackers and refineries. These on-purpose PDH plants should also make propylene supply more directly responsive to feedstock prices. Today we describe how PDH plants are likely to impact the propane market.
