Dow added 650 million pounds at Freeport in 1995. Exxon,Westlake and a joint venture of Lyondell, Quantum and Union Carbide, arebuilding ethylene plants that may turn out propylene. Formosa startedits grassroots facility in mid-1994. Novacorproduces chemical-grade material at Joffre, Alberta, at 110 millionpounds, and Sarnia, Ontario, at 800 million pounds. Petromont produces280 million pounds of polymer grade at Varennes, Quebec.
Production costs are low, which is helping to offset low price levels.
Growth is slowly reducing propylene's high inventories. Monthly contract prices rose until mid-1995, then started to fall and may have finally hit bottom. Margins are narrowing due to falling propylene prices and rising feedstock costs. Prices will remain weak through first quarter 1996, then rise modestly. The emergence of metallocene-based polypropylene and the future of reformulated gasoline may affect demand in the coming years.