Epoxy Propane Market Shift: Europe Faces Dual Challenges, While China Advances in Technology and Capacity

According to recent reports, Hongbaoli's epoxy propane (PO) technological upgrade project - adopting the cumene hydroperoxide (CHP) process - is progressing rapidly and is expected to enter trial production by the end of the year. The epoxy propane produced in this project will be used internally as a raw material for polyether and isopropanolamine production. Earlier adjustments were made to the expansion project due to insufficient energy quotas.

In September 2024, Hongbaoli issued an announcement regarding the adjustment of the epoxy propane expansion plan for its Taixing Chemical subsidiary. Initially, the company planned to expand its PO production capacity from 100,000 tons to 250,000 tons per year, establishing a demonstration project for the CHPPO process in China. However, due to energy consumption control policies, the project faced constraints on energy quotas. As a result, Hongbaoli adjusted the expansion plan to be implemented in phases, with the first phase targeting 160,000 tons, while optimizing project construction based on technological advancements.

On March 6, 2025, Shell announced a force majeure event at its Moerdijk epoxy propane/styrene monomer (POSM) plant in the Netherlands due to technical issues. This 210,000-ton annual capacity facility faced an unexpected production halt. Meanwhile, one of the world's largest epoxy propane production plants - Maasvlakte, jointly operated by LyondellBasell and Covestro, is also at risk of closure.

The potential shutdown of the POSM plant at the Port of Rotterdam, which has an annual capacity of 210,000 tons, could disrupt approximately 15% of the global epoxy propane supply.

1. Chlorohydrin process (traditional method)

2. Co-oxidation methods (PO/SM process and PO/TBA process)

3. Cumene hydroperoxide (CHP) process

4. Hydrogen peroxide oxidation (HPPO) process

5. Direct oxidation with O₂ process

Among these, the chlorohydrin process and co-oxidation methods remain the most widely used technologies.

However, rising natural gas prices in Europe have accelerated the phase-out of the chlorohydrin process, which is known for its high energy consumption and pollution levels. While the HPPO process is a greener alternative, its high conversion costs pose challenges for European producers, who are already facing dual pressures from energy crises and stricter environmental policies.

In recent years, China has been phasing out the chlorohydrin process, with the HPPO and co-oxidation processes now accounting for 60% of total production.

Hongbaoli's CHP process has led to a 15% reduction in raw material costs and a 90% decrease in wastewater discharge.

Binhua Group has independently developed the HPPO process, reducing energy consumption per unit product by 30%.

As the world's largest epoxy propane producer, China is leveraging technological advancements and capacity expansions to fill supply gaps in the global market.

In 2024, China's total epoxy propane imports reached 266,500 tons, marking a 22.92% decrease from the previous year, while exports surged by 211.73% to 13,400 tons. The decline in imports was mainly due to ample domestic supply.

As a key petrochemical intermediate and essential organic chemical raw material, epoxy propane ranks as the third-largest propylene derivative, following polypropylene and acrylonitrile. It is primarily used in the production of:

1. Polyether polyols

2. Propylene glycol

3. Various non-ionic surfactants

4. Key Downstream Applications

1. Home appliances

2. Construction materials (mainly coatings)

3. Furniture

4. Automobiles

Although polyether polyol demand may see a slight decline due to weak real estate and infrastructure growth, it remains the primary downstream sector for epoxy propane.

Meanwhile, dimethyl carbonate (DMC), a key electrolyte solvent for lithium batteries, is expected to drive strong demand growth, fueled by the continued expansion of the electric vehicle (EV) industry.