CEH Report

Table of Contents

Abstract

The Dow Chemical Company and Lyondell Chemical Company are the two dominant players in the propylene glycol industry, with about 34% and 23% of world capacity, respectively. Dow has plants in the United States, Western Europe, Brazil and Australia. Lyondell has plants in the United States, Western Europe and Japan. The next-largest producers are Shell and BASF, with 5% and 4% of world capacity, respectively.

The following pie chart shows world consumption of propylene glycols:

Unsaturated polyester resins (UPR) remain the largest end use for propylene glycol in the United States, Western Europe and Japan, accounting for 26%, 39% and 26%, respectively, of domestic consumption in 2006. The unsaturated polyester resin market is mature in each of these world areas; slow average annual growth during 2006–2011 is projected for this end use in all three regions.

Demand for UPR resins is influenced heavily by regional construction industry trends and the overall health of local economies. UPR resins are consumed primarily in the construction, marine and transportation industries, for which the economy is the driving force. In the major regions, UPR consumption decreased in the early 1990s in response to recessionary effects. Consumption strengthened in the latter 1990s as the economy remained strong, despite the continued replacement in the United States by dicyclopentadiene- (DCPD-) based resins, which use DCPD, ethylene glycol and diethylene glycol instead of phthalic anhydride and propylene glycol. Significant further displacement of propylene glycol resins by DCPD resins is not expected in the United States although this trend is expected to accelerate in other regions of the world, particularly Western Europe.

The propylene glycol market is at risk for consolidation of producers of conventional propylene oxide–based propylene glycol because of market pressure from glycerin-based processes. Glycerin-based plant capacity will be added primarily in the United States and Western Europe while propylene oxide–based plants will be added in China. However, the major impact of glycerin-based propylene glycol will be after 2010.