Five big process PK of propylene oxide in 2025: who is making money and who is losing money

Market status: technology route differentiation intensifies industry reshuffle

china's chemical industry as a whole is under pressure in 2025, but the propylene oxide (PO) market is significantly differentiated due to the diversity of process technologies. As the core raw material of downstream products such as polyether polyol and propylene glycol, PO has an annual global demand of over 12 million tons, accounting for about 40% in China.

By the end of 2025, China has realized the commercialization of five process routes: HPPO method (hydrogen peroxide method) occupies a dominant position in the market, isobutane co-oxidation method follows closely, the share of traditional chlorohydrin method continues to shrink, ethylbenzene co-oxidation method (PO/SM method) remains stable, and the emerging CHP method has built three sets of industrial units with a total production capacity of 550000 tons. Based on the analysis of market data from 2009 to 2025, the five processes show significant differences in profitability, environmental compliance and future prospects.

Process Economy Comparison: Competitive Divide from Loss 9% to Profit 12%

chlorohydrin law: exit countdown under policy phase-out
the traditional process has a theoretical profit margin of only 5% in 2025, which is on the verge of a small profit. Despite reaching a peak profit margin of 37% in 2021, the fatal flaw is that every ton of PO produced produces about 30 tons of high-salt wastewater, which is expensive for environmental treatment. Under the background of the "double carbon" goal and the tightening of environmental protection, the state has clearly restricted the new chlorohydrin plant, and it is expected that the stock capacity will be basically eliminated by 2028, making room for the green process.

HPPO method: short-term pain and long-term value of mainstream processes.
As the route with the highest market share, the HPPO law has taken a historic turn in 2025-a theoretical loss of 9%, the lowest level in 16 years. The loss is mainly due to: hydrogen peroxide prices accounted for more than 40% of the cost, rapid expansion of production capacity led to oversupply, weak downstream demand. However, the process has significant advantages such as reducing the discharge of three wastes by more than 90% compared with the chlorohydrin method, high atomic economy, and no high-salt wastewater.

The key turning point lies in technological breakthroughs: the third generation of titanium silicalite molecular sieve can extend the catalyst life by more than 50%, and the H? O? conversion rate can be increased to 98%; Integrated enterprises can reduce the cost of raw materials by 30% through self-produced hydrogen peroxide. The unit investment cost can be reduced by 20%-30% under the scale effect. On the whole, the HPPO method has a high probability of turning losses into profits within 2-3 years, and the medium and long-term market share is expected to continue to expand.

Isobutane co-oxidation method: the king process with the strongest anti-cycle ability
in 2025, the theoretical profit margin was 12%, which was unique in the five processes. The full cycle from 2009 to 2025 has always been profitable, with an average profit margin of 20%-30%. The core competitive advantage lies in: the raw material isobutane comes from C4 fraction or LPG of refinery, and the cost is controllable; The by-product tert-butyl alcohol (TBA) and its derivative MTBE have stable market demand and high value. High investment threshold (40-5 billion yuan per unit), high technical barriers and high requirements for industrial chain integration form a "three high" moat.

Wanhua Chemical, as the owner of China's first isobutane co-oxidation plant, through the whole industrial chain layout of refining-isobutane-PO-TBA/MTBE, the theoretical profit margin may be 5-10 percentage points higher than the industry average. However, we need to be alert to the medium-and long-term impact of increased penetration of new energy vehicles on MTBE demand-if the number of fuel vehicles falls by 30% in 2030, MTBE demand may shrink by 20%-25%, and new TBA application scenarios need to be developed to hedge risks.

Ethylbenzene co-oxidation method: a balanced choice for robust profitability
the theoretical profit margin of 2% in 2025, the key advantage is that the full cycle of 2009-2025 will remain profitable and stable. By-product styrene (SM) has high added value (can be used for PS, ABS production), can effectively share the cost, relying on ethyl benzene-PO-SM industry chain synergies are obvious. For integrated enterprises, the theoretical profit margin can be increased by 5-8 percentage points. Disadvantages are the large scale of equipment investment (30-4 billion yuan per set) and long process flow.

CHP Method: Growing Pains of Emerging Routes
the theoretical loss of 7% in 2025 is the worst performance in history. The process has always been profitable from 2009 to 2021, but after 2022 the market competition is white-hot and the profit margin has narrowed sharply. For enterprises with the integration of cumene can maintain a small profit, but the independent device of purchased raw materials is facing greater pressure. In the medium to long term, there is still room for improvement as the market is cleared and the cost advantages of integrated enterprises appear.

The future pattern: dual-process dominance and overseas market inspiration

comprehensive environmental policy, technological progress, cost competitiveness and industry chain synergy four dimensions, HPPO and isobutane co-oxidation will become the leading process in the future..

HPPO method is in line with the global trend of green chemistry, and the energy consumption is reduced by 30%-40% compared with the traditional process. With the popularization of the third generation titanium silicate molecular sieve technology, the catalyst cost can be reduced by 40%, and the utilization rate of H? O? is increased to 99%. Integrated enterprises can reduce the cost of raw materials by 25%-35% through self-built hydrogen peroxide devices. Under the background of the gradual implementation of the carbon border adjustment mechanism (CBAM) in Europe and the United States, the competitive advantage of low-carbon technology will be further highlighted.

Isobutane co-oxidation method by virtue of first-mover advantage, scale advantage and industrial chain barriers, in the context of environmental protection tightening, industry concentration will continue to consolidate the competitive position. However, it is necessary to dynamically track the impact of global new energy vehicle penetration on the MTBE market.

Chlorohydrin method will accelerate the exit, CHP method and ethyl benzene co-oxidation method as a transitional process, in the hands of integrated enterprises still have room for survival, but independent device profit pressure continues to increase.

Revelations for overseas markets:

1. supply chain security: China's PO capacity concentration increase, process green transformation will affect the global supply pattern, overseas buyers need to lock in the supply relationship of HPPO and isobutane enterprises in advance.
2. Technology Spillovers technological breakthroughs such as the third-generation titanium silicon molecular sieve may be authorized overseas to provide process upgrading opportunities for European and American enterprises.
3. Carbon footprint competition: HPPO method products reduce carbon emissions by more than 60% compared to the chlorohydrin method, have trade advantages under the CBAM framework, overseas downstream enterprises need to pay attention to the type of supplier process.
4. investment timing: The industry is at the bottom of the cycle, the HPPO method enterprise valuation is low, with medium-and long-term investment value. Although the valuation of isobutane co-oxidation enterprises is high, but the anti-cycle ability is strong, suitable for sound investors.

It is recommended that overseas practitioners focus on tracking: ① the pace of production capacity delivery of HPPO and isobutane co-oxidation enterprises; ② the progress of commercialization of third-generation catalyst technology; ③ the cost advantage of integrated enterprises; ④ the impact of new energy vehicles on MTBE demand. Driven by the triple drive of environmental policy increase, technology iteration acceleration and capacity structure optimization, China's PO industry is undergoing profound changes, which will reshape the global supply chain landscape.