World Analysis – Propylene Oxide

Long-term outlook to 2060

Propylene oxide (POX) is a highly reactive chemical intermediate with no direct consumer applications. Its primary use is the production of polyether polyols, which are essential building blocks for flexible and rigid polyurethane systems. These polyurethane materials are used extensively across transportation, construction, appliances, furniture, bedding, packaging, adhesives and sealants, and surface coatings, making propylene oxide a critical component in several major industrial value chains. The second-largest end-use segment for POX is propylene glycol, widely consumed in the food and pharmaceutical industries and for antifreeze and aircraft deicing applications. A smaller portion of POX demand is directed toward butanediol production.

Propylene is the main feedstock for producing propylene oxide, and three core production technologies are used globally: the chlorohydrin route, peroxidation, and hydroperoxidation. The chlorohydrin process, once the dominant route, has steadily declined as newer, cleaner technologies gain adoption. Because this method requires chlorine, it is now used primarily by integrated chlor-alkali producers.

The newest technologies, known collectively as PO direct processes, including hydrogen peroxide–propylene oxide (HPPO) and the cumene-based route, are designed to manufacture POX without dependence on coproduct economics or the environmental challenges associated with the chlorohydrin method. Although direct PO technologies are generally more capital-intensive and have higher operating costs than propylene oxide–styrene monomer (PO–SM) or propylene oxide–tert-butyl alcohol/methyl tert-butyl ether (PO–TBA/MTBE) routes, they have become preferred options due to their lower operational risk and reduced environmental footprint.

In contrast, POX processes that rely heavily on coproduct values have faced increasing volatility. PO–SM and PO–TBA/MTBE routes generate coproducts at 2.1–2.3 times the output of POX, leaving producers exposed to fluctuations in coproduct markets. This dynamic has reinforced the long-term strategic shift toward direct PO production technologies.

Long-term outlook to 2060

The World Analysis – Propylene Oxide provides an in-depth assessment of the global propylene oxide market, providing comprehensive analysis and strategic insights into the key developments shaping long-term supply, demand, trade, and pricing outlooks. This service equips industry participants with the analytical foundation needed to navigate market volatility and anticipate structural shifts across the propylene oxide value chain.

Subscribers gain access to a full suite of reports, data files, analytical tools, and visualization modules, available online and downloadable from our website, including:

• A strategic report outlining critical insights and the future trajectory of global and regional markets

• Online Data Browser access to supply, demand, and capacity databases

• Continuously updated company/shareholder capacity listings, capacity integration analysis, and rankings of top producers/consumers, including surplus/deficit capacity profiles

• A comprehensive Data Appendix (Excel) featuring supply/demand and capacity tables, plus a dashboard with standard visualizations for all countries and regions

• Excel data files with long-range supply/demand graphics and price forecasts through 2060, along with detailed trade grids showing country- and region-level trade flows with 5- and 10-year projections

• An interactive online dashboard visualizing capacity, integration, supply/demand balances, trade flows, and price, cost, and margin forecasts

• Explanatory Notes detailing data sources, methodology, assumptions, units, conversion factors, and full World Analysis deliverables

• Energy and macroeconomic assumptions used in the long-term outlook

• Price assessment methodology and forecasting framework

In addition to the main product, propylene oxide, capacity data is provided for the following products:

• 1,4-Butanediol
• Polyether polyols
• Propylene glycol

This World Analysis provides detailed intelligence on capacities, production, demand, and trade across all major producing and consuming countries, regions, and global hubs. While robust data collection underpins the historical and forward views, the true value of the service lies in the expert interpretation and market analysis applied by our global team.

Data verification is a central pillar of our approach. Direct engagement with key industry participants ensures that our conclusions reflect real-world market behavior and deliver the most accurate, realistic forward outlook for the global industry.

Long-term outlook to 2060