Propylene Supply: Go Green

Ethylene (C2) and Propylene (C3) are the two most important olefins currently in the industry for the production of various industrial chemicals and polymers. Both Ethylene and Propylene are co-produced in crackers and refineries; however, the ratio of the output depends on the type of feedstock used and the severity of cracking. If naphtha is used as a feedstock for the production of ethylene, the output of propylene remains substantial, however, gas crackers that process ethane gas, produces more of ethylene than propylene and this is catching up as the current market trend. Most of the ethylene manufacturers in the US are currently moving to lighter feeds for the cracking of ethylene on the back of improved margins and feedstock security, due to the abundant availability of shale gas reserves in the region. This is resulting in a reduced yield of C3 and consequently the total propylene production from ethylene crackers has been dropping significantly. With the demand for propylene outpacing the current supply levels, the supply assurance for propylene is becoming challenging. Propylene continues to get expensive and the price ratio of ethylene and propylene is currently around 1.2 and would reach close to 1.5 in the coming years if the current situation continues.