Published March 2016
Propylene oxide (PO) is a small-volume differentiated petrochemical used, for the most part, in the manufacture of polyether polyols for urethanes, propylene glycols, glycol ethers, and polyalkylene glycols for a variety of chemical intermediates and functional fluids.
Polyether polyols are the major end use for propylene oxide, accounting for more than 67% of the total world consumption in 2015. China and Western Europe are large consumers of PO for polyols, together representing 55% of the total, followed by the United States with 21%. In the next five years, use of PO for polyether polyols is expected to grow at about 4.7% per year to about 69% of the total PO consumed in the world.
The following pie chart shows world consumption of propylene oxide:
China drives growth, with increased consumption of polyether polyols in the growing PU market (driven by increased production in the automotive and household sectors). PO is difficult to transport and ship; its derivatives (polyols and PG) are easier to transport.
Increasing PO demand for polyols in China will push consumption of PO for this end use upward by more than 25.5% over the next five years. As a result, China will surpass Western Europe and the United States to become the largest consuming region (36% of total world consumption) by 2020. With the decline expected in Western Europe and low growth in the United States, the United States will slip to second place (18.3%), followed closely by Western Europe (18.3%). PO growth in this use in South Korea will keep it in the fourth position in the world, with just a 6% share of world consumption in 2020.
Propylene glycol (PG) production is the second-largest end use for PO, with about 16% of the total world consumption in 2015. The United States is the largest consumer for PGs, with about one-third of the world total.
PO is consumed in the production of butanediol only in the United States and Western Europe. This application accounts for only 2.0% of the world's PO consumption and is expected to grow at 1.3% per year for the next five years. Outside of these regions other routes to butanediol, which use either acetylene, n-butane, or allyl alcohol as the starting material, are generally preferred.
By 2020, China will have become the largest propylene oxide consuming country, with a share of over 30%. The United States and Western Europe combined will account for nearly 44% of the total.
Over the next five years (2015–20), world propylene oxide consumption is forecast to grow at a rate of about 4.2% per year. This increase will be driven by growth of polyols for urethane use in flexible and rigid foams, which represent about two-thirds of world propylene oxide consumption. China in particular will enjoy five-year growth at more than 7.4% per year, driven by polyurethane polyol growth. Two regions, the Middle East and the Indian Subcontinent, will grow at a faster rate, but from a small base.