According to statistics, as of the end of 2005, there were a total of 12 domestic propylene oxide producers with a total installed capacity of nearly 600,000 tons (excluding China Shipping Shell), of which an effective production capacity was 550,000 tons. In 2005, domestic production of propylene oxide was 513,000 tons, and the operating rate of the equipment was as high as 92%.
In 2005, the domestic total demand for propylene oxide was 648,000 tons, and the national production rate was nearly 80%; the import volume was 146,000 tons. The import products were mainly Japan and Singapore; domestic companies Jinxi Chemicals and Shandong Binhua had a small amount of exports since 2005. At present, the downstream derivatives of propylene oxide are mainly concentrated in the polyether polyol industry. In 2005, the polyether polyol industry accounted for 85% of the entire propylene oxide consumption, which is far higher than the global average of 70%. The domestic propylene oxide industry has maintained a rapid growth in consumption since the early 1990s. From 1990 to 2005, the average annual growth rate of propylene oxide consumption was as high as 22.6%. Since 2005, with the gradual progress of the polyurethane industry in China, the growth rate of the demand for propylene oxide in the upstream raw materials has slowed down significantly, and the growth rate in 2005 was below 5%. It is expected that in the next five years, the average annual growth rate of China's propylene oxide will remain below 10%. By 2010, it will reach a consumption scale of 1 million tons.
In 2006, it was the year that the domestic propylene oxide plant capacity was newly built and expanded the most. In the whole year, nearly 400,000 tons of new propylene oxide production capacity was added, and another 400,000 tons of new capacity will be added in the next few years. By 2010, the cumulative domestic production capacity will reach 1.4 million tons. Industry experts predict that the growth rate of demand for propylene oxide will be greatly slowed down due to the slowdown in demand from the downstream derivatives market after 2006; due to the localization of polyether polyols and other derivatives, productivity will increase in 2006 and 2007. The apparent consumption of propane will still increase significantly within 2 years. According to forecast, consumption in 2006 will reach 770,000 tons, an increase of 20% from 2005. By 2010, the total demand is expected to exceed 1 million tons, when domestic propylene oxide supply and demand balance, and began to export to the surrounding markets. It is expected that after 2007, Japan and Singapore will still maintain a small amount of imports, but Chinese domestic production companies will also increase their exports, and the net value of imports will be close to zero.
With the commissioning of the project of 250,000 tons in the China Sea, the domestic market of propylene oxide will undergo major changes. China Ocean Shell Project is currently the largest set of propylene oxide units in the country. The process uses propylene oxide/styrene cogeneration process, and the production cost is lower than the conventional domestic chlorohydrin process. China National Offshore Gas Appliances will play a key role in domestic supply and demand and prices. According to the current product setting of the China National Offshore Oil and Shell petrochemical project, it is estimated that approximately 130,000 tons of propylene oxide (polyether polyol, propylene glycol) will be consumed internally each year, and that other 110,000 to 120,000 tons of propylene oxide will need to be sold or supplied in commercial quantities. Exchanges between businesses. According to the previous market share of Shell in the domestic market, the commissioning of its equipment will surely capture the market share of other domestic and foreign suppliers. In terms of domestic supply, the sale of Sinopec Shell propylene oxide will be mainly concentrated in Jiangsu, Zhejiang, Shanghai, and Tianjin, while the production in North China and Northeast China will still be mainly domestically produced. In addition, in the downstream consumption sector, the polyether polyol industry is still a large consumer of propylene oxide, and industry experts predict that by 2010 the proportion of consumption will be adjusted to around 80%.
In addition, the production of the 250,000-ton plant will have a significant impact on the entire Asia Pacific region. In 2004 and 2005, the imbalance between supply and demand of propylene oxide in the Asia Pacific region will be reversed in 2006, and the supply and demand in the market will be basically balanced. In the next few years, domestic imports of propylene oxide will gradually reduce or withdraw from the market; foreign major suppliers will also greatly weaken their share in the domestic market. As the CSPC unit has a stronger advantage over the domestic chlorohydrin method in terms of raw material supply, production cost, and scale effect. At the same time, localization management makes it more advantageous than foreign companies in transportation costs. The market competition among foreign suppliers will be greatly intensified, and the decline in market prices will also be inevitable; after that, the profit margin of propylene oxide manufacturers will be greatly weakened. It is expected that the domestic price of propylene oxide will remain in the price range of 12,000 to 15,500 yuan in 2006, and the profit of the manufacturers will return to a reasonable level.
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