PROPYLENE MARKET ANALYSIS

Fluctuations in crude oil prices have played a major role in restraining the growth of the global propylene market in recent years. Propylene is primarily produced through the steam cracking process, where petroleum liquids and natural gas liquids rich in hydrocarbons are separated through heating in the presence of steam. As crude oil and natural gas are the major feedstock required for steam cracking, volatile crude oil prices directly impact the feedstock costs and overall economics of propylene production.

Market Opportunities: Development of bio-based propylene

Development of bio-based propylene has the potential to provide significant opportunities in the global propylene market going forward. As awareness around sustainability and reducing reliance on fossil fuel-based products grows worldwide, the demand for bio-based and renewable feedstocks is increasing rapidly across various industries. Propylene is a key petrochemical used in the production of several essential plastic and chemical products. Currently, nearly all of the global propylene supply is met through oil refineries. However, with depleting petroleum reserves and rising environmental concerns, bio-based alternatives are being explored as a more sustainable solution for long-term security of propylene supply.  Several companies and research organizations are actively working on developing technologies to produce propylene at a commercial scale using renewable biomass sources like sugar cane, corn, agricultural residues, and wood as feedstock. Some of the bio-refining pathways under investigation include producing propylene through fermentation of biomass-derived sugars or thermochemical conversion via gasification. For example, firms like Global Bioenergies in France have demonstrated the production of bio-based propylene through fermentation at pilot plant scale successfully. There are also ongoing projects to genetically modify certain microorganisms to directly produce propylene instead of ethanol. If these bio-based production routes can be optimized and costs reduced through innovation, it could displace a significant portion of fossil-based propylene consumption in the future.