According to a study from Wood Mackenzie, supply and demand relationships for propylene will shift dramatically in the coming years as global capacity rises from 109MM mt/y today to an estimated 165MM mt/y in 2030. "The $120B global propylene market has regularly been in a shortage situation over the past four years, causing high prices and therefore a loss of market share relative to competing materials," said the consultancys Head of Americas Chemicals Research Stephen Zinger. In the past, propylene demand has largely been met by output from naphtha-fed steam crackers, but as petrochemical firms switch to ethane—mainly in the US, where the shale boom has released abundant volumes of the lighter feed—propylene supplies have fallen. Meanwhile in China, demand growth has surpassed production capacity additions, putting additional strain on supplies. "These recent shortages in global propylene markets have attracted a substantial amount of investment in two less popular on-purpose technologies, methanol to olefins (MTO) and methanol to propylene (MTP) as well as in propane dehydrogenation (PDH)—an existing technology that previously had seen limited development," said Zinger.
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