The Chemical Cost Curve Service – Propylene provides detailed production cost coverage for more than 530 polymer grade/chemical grade (PG/CG) propylene production units operating around the world today, expected to increase to nearly 600 units onstream over the next five years.
Cost curves give insight into which production technologies and feedstocks provide cost advantages, the degree of the advantage and how this is expected to change over time. Find out which are the lowest-cost regions, countries and plants, both today and in the future. Identify the marginal producing location and how this affects pricing. Understand how the shape of the cost curve affects overall and regional profitability for this key building block of the chemical industry.
Capital investments in propylene production units in recent years have focused on Middle Eastern countries to diversify their petrochemical production base and in areas such as China with rapid demand growth. The current and planned development of numerous shale gas fields in the United States is forecast to sustainably supply extremely cost competitive feedstock costs for natural gas, ethane and propane compared to crude oil. As steam crackers shift to lighter feeds, co-product propylene production is reduced. However, these shifting economics have made on-purpose propylene production by certain routes very cost competitive with on-purpose propylene now the fastest growing segment of propylene supply, fast approaching more than 15 percent of global propylene production. The first propane dehydrogenation plant started production in the US in late 2010 and additional units have been announced. Metathesis units are also receiving renewed interest.
In addition to natural gas price trends affecting the landscape for the propylene production, coal economics is also having an increasingly large impact, as China pursues an aggressive program of coal-based chemicals. The first coal-to-olefins plant started up in 2010 and in as little as five years, more than 20 plants producing propylene either from coal or directly from methanol are expected to be onstream, all in China. With propylene produced from an increasingly diverse feedstock base, understanding the global production cost curve and the relative position of each technology and geographic region becomes even more complex and critical to business success.
The Cost Curve Service – Propylene analyzes each of the world’s PG/CG propylene production facilities, building up cost based on the technology and feedstock slate, estimated feedstock cost and by-product credit value, utility consumption and other variable and plant fixed costs. Plant size, degree of integration and operating rates are all taken into account.
The cost curve covers all of the key processes for producing PG/CG propylene, including
- Natural gas liquids (NGL)
- Naphtha, gas oil and flexible feed crackers
Refinery FCC / Splitter
Coal to Olefins
Coal to Propylene
Methanol to Olefins
High severity cracking
Any person, company or government interested in producing or purchasing propylene, or designing or constructing propylene plants, should be aware of the competitive positions within the global PG/CG propylene industry. Chemical, utilizing its extensive databases, models and expertise, has prepared the Cost Curve Service to address this need.