The propylene production process is divided into three main categories – what is the relative advantage of olefin production from methanol?

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With the rapid development of the global economy, the chemical industry has seen swift growth, and demand for propylene, an important petrochemical raw material, is increasing rapidly across countries around the world. Market analysts say that currently, there are three main production methods for propylene in China. In addition to the newer processes such as propane dehydrogenation and coal-based olefins, which have gained prominence in recent years, traditional processes like catalytic cracking and steam cracking remain the primary sources of propylene in the country. As an important chemical raw material, facilities used for propylene production attract significant attention from the market. 　　Propylene produced from oil: mainly a by-product. This is an established production method, and it accounts for the largest share of total propylene production at present. There are two approaches to its production: steam cracking and catalytic cracking; in both cases, propylene is a by-product. The largest source of propylene is the by-product of ethylene plants. Steam cracking units are mainly in the hands of large state-owned enterprises, which produce ethylene as their main product, along with propylene and butadiene as by-products. Their operation rates remain at around 80–90%, and for state-owned enterprises, it is easier for the operation rate to increase but harder to decrease. Companies provide products for the downstream industry; most of these products are used in PP production, and their prices fluctuate in line with PP prices. There is usually a lag in price changes. The volume of exports is relatively low, and some downstream facilities lack enough propylene and thus need to purchase it from outside. However, due to the complicated procedures involved, most companies are reluctant to enter such partnerships. 　　The second largest process for producing propylene from oil is catalytic cracking units, which meet about 28% of the demand for propylene. Catalytic cracking units are mainly concentrated in Shandong, which has always been the ‘barometer’ of the propylene market, experiencing the most frequent price fluctuations; it is also the largest consumer market for propylene. In the second half of this year, the price of propylene in Shandong dropped below 4,000 yuan per ton, leading many companies and traders to argue that it would be better to sell liquefied gas instead. 　　Propane to propylene: a tough business. Market analysts say that propane dehydrogenation for the production of propylene is a technology that has gained popularity recently. This process differs from those that use oil as a feedstock, as it produces only propylene; as a result, the propylene obtained through this method has good quality, making it suitable for uses such as butyl acetate where high standards for propylene quality are required, thanks to its low sulfur content. Another advantage of this device is that its cost is determined solely by the price of propane. Several PDH manufacturers in China use imported propane at low prices, which is mostly sourced from the United States and the Middle East. 　　At present, China’s propane dehydrogenation capacity has reached 3.45 million tons per year. Since the first PDH unit at Tianjin Bohua achieved successful operation, companies such as Zhejiang Satellite and Ningbo Haiyue also began to produce propylene, leading to an increase in its supply and a continuous decline in prices. Of China’s 6 PDH units, 5 are equipped with downstream processing facilities, while only Ningbo Haiyue’s propylene is exported entirely; Tianjin Bohua first supplies propylene to local alkali factories, with the remaining amount being exported to surrounding areas and Shandong Province. The three PDH plants owned by Zhejiang Satellite, Ningbo Haiyue, and Donghua Yangtze River Petrochemical have contributed significantly to increasing the supply pressure in the East China region. Although there is also downstream consumption in this region, the volume is still relatively small. So what happens to the remaining propylene? It is either sold to traders or sent to Shandong. 　　Market analysts say that propane dehydrogenation companies have had a tough time during this period; rising prices of propane upon arrival at the port have led to decreasing profits for these companies. \"It’s not worthwhile to shut down operations, and continuing to operate results in losses as well.\" ”Roughly speaking, the cost of propane dehydrogenation has remained around 4,500–5,000 yuan per ton since October; in the East China market, the price is 4,700–4,800 yuan per ton, leaving little to no profit. 　　Methanol to olefins: relatively advantageous. China’s energy distribution is characterized by an abundance of coal, a shortage of oil, and limited gas reserves; therefore, for a considerable period in the future, coal will still account for 65%~70% of China’s total energy consumption. As oil resources become increasingly depleted, the process of producing olefins from coal-derived methanol is gradually taking hold in the propylene market. At present, the total capacity for methanol-to-olefins production in our country is 7.79 million tons per year, accounting for 29% of the country’s overall propylene production capacity. Most methanol-to-olefins (MTO) plants are operating relatively smoothly under the current market conditions, while methanol-to-propylene (MTP) plants face greater difficulties. “At the very least, MTO still has ethylene to support it; currently, the price of ethylene is relatively reasonable. On the other hand, the situation for propylene in methanol-to-olefins processes is terrible. ”. 　　Most of China’s MTO and MTP plants are located in the coal-rich regions of the northwest. The price of coal in China is lower compared to that of crude oil, so coal-based olefins do have certain advantages. However, due to their geographical location, these plants do not have an advantage; the shipping costs to Shandong are too high, unless they are willing to reduce the price of propylene. Therefore, most coal chemical enterprises have their own facilities for producing polyolefins downstream. 　　Looking at China’s propylene market, the three major players each have their strengths, and they balance each other out while also complementing one another. Although we still need to import some propylene at present, as the domestic propylene market grows, it may be able to meet domestic demand in its entirety.