China becomes self-sufficient in propylene production with Iranian methanol

According to Energy Press, in recent years, the global polypropylene market has witnessed significant developments; developments that show that China, relying on the development of new technologies and the use of methanol feedstock, has achieved significant self-sufficiency in the production of propylene and its derivatives, while Iran remains in the initial link of the value chain.

Increasing China’s self-sufficiency in propylene and polypropylene production
By launching a large number of new capacities in propylene production units through the MTP (methanol to propylene) and PDH (propane to propylene) routes, China has been able to meet about 96 percent of its domestic needs in 2024. The country, which is the largest producer and consumer of propylene value chain products in the world, has continuously reduced its polypropylene imports compared to 2021 by implementing this industrial policy, and in the first seven months of this year alone, its imports have decreased by 8% to 1.92 million tons.
At the same time, producers in Southeast Asia, including Longsan Petrochemical and PRefChem, have opened a new arbitrage window in the country’s market by reopening their units and offering products at prices lower than China’s domestic rate. However, the continued high supply in China has caused the domestic price of polypropylene to reach its lowest level in the last five years and the market continues to face a demand slump.
The share of Iranian methanol in the feedstock of Chinese propylene units
One of the notable points in this regard is the prominent role of Iranian exported methanol in China’s propylene value chain. According to data from the Kpler Institute, in 2024, about 40 percent of China’s methanol imports will come from Iran, methanol that Iran is forced to sell to China at a price below the world rate due to international sanctions. This methanol is converted, especially in Chinese MTP units, into propylene, a substance known in the petrochemical industry as “petrochemical caviar.” The Chinese then supply this propylene and its derivatives with a value added of several hundred times that of Iran to global markets, including Iran.