The recent sharp drop in crude oil costs and the start-up of new cracking units will stimulate the growth of propylene production in the United States in 2019, although export and unplanned shutdowns may cause some volatility in the market. Market participants believe that overall, in 2019, the U.S. propylene market will be in a balance between excess and excess.

For most of 2018, tight supply of propylene in the United States led to higher prices. At the beginning of last year, propylene prices in the United States rose sharply due to the unplanned shutdown of some propane dehydrogenation (PDH) plants. In the second half of the year, the price of propylene continued to rise in the US market due to the failure of some PDH units and the reduction of propylene production in cracking units.

Another reason for the decline in propylene production in the U.S. pyrolysis plant is that the production of propylene by-products is limited by the increase in the amount of ethane used in the pyrolysis plant. With the new cracking plant in the United States put into operation in March and July 2018, the supply of ethylene in the United States increased substantially, resulting in a sharp drop in ethylene prices. Low ethylene prices have squeezed the profit margins of American cracking plants, prompting them to use more ethane, which is the most economical raw material for ethylene production. At the same time, strong crude oil prices support the prices of heavier raw materials such as naphtha, propane and butane, which makes cracking heavier raw materials more uneconomical.

Although the production of PDH units in the United States may continue to be unstable in 2019, propylene production from cracking units will rebound at the end of 2018, and this trend is likely to continue until 2019.

At the end of 2018, the price of crude oil fell and the profit margin of cracking unit increased, which improved the economy of heavy cracking raw materials. Crude oil prices are not expected to rise substantially in 2019, which may maintain the economic feasibility of heavy cracking raw materials. Increased use of heavy pyrolysis feedstocks will stimulate the increase of propylene production in pyrolysis units.

In 2019, U.S. refineries will maintain a high start-up rate, so propylene production from refineries is expected to be guaranteed. On the one hand, demand for U.S. fuel exports, especially for Mexico, will remain strong. On the other hand, due to the gradual approaching of the new International Maritime Organization (IMO) regulations on sulfur content of ship fuel in 2020, ship owners need to switch to low sulfur content fuels, so diesel demand is expected to increase.

With the increase of propylene production from cracking plants and refineries in 2019, the unplanned shutdown of PDH plants has brought less pressure on propylene prices than in 2018.

After the off-season of demand at the end of 2018, propylene demand is expected to rebound in early 2019, as downstream producers need to rebuild propylene inventories at the beginning of each year. The recent fall in propylene prices may stimulate downstream producers to increase plant start-up rates and bring upward pressure on the propylene market.

On January 20, the hydrofluoric acid commodity index was 114.94, which was the same as yesterday. It was 18.15% lower than the peak of 140.43 points in the cycle (2018-02-21), and 114.48% higher than the low of 53.59 points on November 30, 2016. (Note: Period refers to 2011-09-01 to date)

According to statistics, the price trend of domestic hydrofluoric acid market has been lower recently. The domestic market price of hydrofluoric acid is 12625 yuan/ton as of the 21st day, and the domestic start-up rate of hydrofluoric acid is about 60%. Enterprises reflect that the supply of hydrofluoric acid on the spot is sufficient at present, the situation of goods on the spot is getting worse recently. Some enterprises have increased their hydrofluoric acid stocks and slightly lowered the ex-factory price, but due to the high expenditure of raw material market. The market price of hydrofluoric acid has fallen by a very limited margin. At present, the mainstream of hydrofluoric acid negotiations in the southern region is about 12,000-12,500 yuan/ton, while the price of hydrofluoric acid in the northern market is 12,000-13,000 yuan/ton. Domestic hydrofluoric acid market price trend is slightly lower, spot supply is sufficient, due to the recent high prices of raw materials market, fluorite prices are in a high state, but the price of raw materials fluorite slightly declined, the market price of hydrofluoric acid slightly lower.

Recent downstream refrigerant product maintenance devices are more, the demand for upstream fluorite and hydrofluoric acid has weakened, the recent downstream refrigerant trading market has declined, and the price of hydrofluoric acid products has slightly decreased. Recent downstream refrigerant market transactions are cool, R22 refrigerant facility starts at 70%, R22 refrigerant facility start-up rate declines, the main production enterprise bulk water out-of-factory offer price drops to 17500-18500 yuan/ton, but the production enterprise does not have bulk water spot, mainly with a small number of cylinders shipped. In addition, the actual demand side of the market has declined, and the shipment market trend is poor. The domestic market price of R134a is slightly lower, the start-up rate of production enterprises is lower, the market demand for refrigerants is weakened, and manufacturers mainly export their products. However, the on-site transaction price does not change much, and the merchants purchase on demand. Recently, due to the impact of equipment maintenance, the upstream market demand for hydrofluoric acid has weakened.

Refrigerant on-site transaction prices slightly lower, refrigerant industry equipment overhaul increased, the upstream hydrofluoric acid market demand weakened, coupled with the upstream refrigerant industry to resist high prices of raw materials, Business Analyst Chen Ling believes that the hydrofluoric acid market may continue to decline, hydrofluoric acid prices will be around 12,500 yuan/ton.