Europe Propylene: USA or UAE to help close the monomer supply gap?

The European “supply gap” for propylene monomer started to develop in 2017. At the same point in time, many market participants in Europe were looking to the USA as a potential structural supplier of propylene monomer. The supply gap is expected to be sustained until 2022/2023, until Europe brings online domestic PDH projects from INEOS/Borealis. Insufficient volumes are available within Greater Europe and so deep sea imports are needed. Some shipments of propylene from the USA have taken place on a spot basis through 2017 and into 2018. Although structural flows have not commenced and a high degree of risk is seen by many in Europe in importing propylene currently. This risk is primarily due to the longer-lead time and different pricing dynamics in Europe and USA. This insight explores the changes expected in the propylene balance in the United Arab Emirates in the near-term and whether the UAE can be an increasing supplier of propylene monomer into the European region.