New Capacity Addition will Transform Southeast Asia into a Self-Sufficiency Region for Propylene
The Southeast Asian market generally has experienced inadequate supplies of propylene in the past. However, with the start-up of the new production plants, the regions supply and demand will turn out to be more adjusted to-long throughout the next five years. The current propylene production capacity in Southeast Asia
is around 5.5 million tons. 80% of propylene is mainly produced from steam crackers and refineries due to the relatively high percentage of liquid steam crackers in the region. In addition to these, new steam cracker based capacities are expected to start up over the next five years. As per the expansion planned till date, alternate sources of propylene will add over 1,092 kilo tons of propylene capacity in Southeast Asia. The expansion projects include Chandra Asri Petrochemical Plant Expansion (2015) in Indonesia, Refinery Unit IV Cilacap (2018) in Indonesia and Long Son Refinery (2020) in Vietnam.
Achieving self-sufficiency on high demand petrochemical product like propylene will reduce the import burden from Southeast Asia nations. China is the major importer of propylene from Southeast Asia. The imported propylene is being used to produce the major derivative product i.e. polypropylene. Majority of the propylene produced in the Southeast Asia are consumed to produce polypropylene. The demand for polypropylene is expected to rise owing to the rising demand for plastic in developing countries in Southeast Asia.
New capacity addition will help the region to become self-sufficiency for propylene. Apart from self-sufficiency, it will also contribute towards producing derivative products such as polypropylene at a much lower cost. Southeast Asian petrochemical industry is expected to experience a remunerative period once these new plants become operational.
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