Material Insights · Understanding the Material World

Ethylene and Propylene

Ethylene and propylene come out of the same steam cracker, in proportions fixed largely by the feed: ethane gives almost no propylene, naphtha gives about half as much propylene as ethylene. The move of US crackers to cheap ethane cut co-product propylene, and dedicated routes such as propane dehydrogenation grew to fill the gap.

Ethylene (chemical) and Propylene (chemical): 3 relationships.

How they are linked

1. Co-products of steam cracking

Joint production · Strong · One cracker yields both

Cracking breaks hydrocarbons into a mix of light olefins; light feeds give mostly ethylene, while heavier feeds give more propylene alongside it.

  • 76% and 3% ethylene and propylene yield from ethane
  • 31% and 16% ethylene and propylene yield from naphtha
  • 40 to 60% propylene output as a share of ethylene, non-ethane feeds

The yields come from 1992 cracking data, but the pattern still holds. An operator can shift the ratio only within limits by changing feed or severity, so neither olefin can be expanded alone: crackers built for polyethylene bring propylene whether polypropylene needs it or not.

Sources: US Department of Energy (EERE); Chemical Market Analytics (OPIS)

2. Ethane shift cut propylene

Transition · Asymmetric · Lighter feed: more ethylene, less propylene

Cheap shale ethane led US producers to build crackers on light feed, which raised ethylene output but added little propylene.

  • 40% planned rise in US ethylene output, to over 37 Mt, with projects online in 2017 or 2018
  • 190,000 b/d extra US propane demand from six PDH projects by end-2018

All US ethylene projects planned at the time used light feed, so the extra output added little propylene, while the same shale gas made propane cheap for dedicated propylene plants. The ethylene boom thus opened a propylene gap that other routes had to fill.

Sources: US Department of Energy (EERE); US Energy Information Administration

3. On-purpose propylene

Substitution · Rising · PDH and other routes make propylene without ethylene

Dedicated routes, led by propane dehydrogenation, produce propylene without any ethylene, so they loosen the co-product tie.

  • 21% to 28% on-purpose share of propylene output, 2018 to 2028
  • 11% to 20% PDH share of propylene output, 2018 to 2028

PDH is now the largest dedicated route. Of 15 on-purpose propylene units due to start in 2023, 12 of them in China, 11 were PDH units with 8.4 Mt/yr of capacity, and propylene capacity in 2020 to 2024 was expected to grow 2.3 times faster than demand. More propylene now comes from plants whose economics depend on propane, not on cracker run rates.

Sources: Chemical Market Analytics (OPIS); Chemical Week

For investors

Key learnings

  1. Feed choice fixes the split: ethane gives about 3% propylene against 76% ethylene, naphtha about 16% against 31%.
  2. PDH is expected to rise from 11% to 20% of propylene supply over 2018 to 2028, so propylene prices increasingly follow propane and PDH margins.
  3. Propylene capacity was expected to grow about 2.3 times faster than demand in 2020 to 2024, so cracker operators cannot count on propylene prices to offset weak ethylene margins.

What to track

  • Propylene to propane spread (PDH margin): Sets whether on-purpose plants run; a weak spread slows supply growth (Weekly · Platts, ICIS)
  • Propylene to ethylene price ratio: A higher ratio favours naphtha crackers run for propylene (Weekly · Platts, ICIS)
  • Cracker feed slate, ethane against naphtha: More ethane means less co-product propylene (Quarterly · EIA, company reports)

For policymakers

Key learnings

  1. Choosing gas or naphtha feed for a new cracker also decides how much propylene the country will get from it.
  2. Dedicated propylene plants run on propane, so they add exposure to propane prices and trade.
  3. China's rapid PDH build-out shows how capacity added faster than demand can flood a co-product market; planners should size units against regional balances.

What to track

  • Propylene and polypropylene import share, India: Rising imports show where cracker or PDH capacity is missing (Annual · MoPNG, DGCI&S)
  • Propane contract price (Saudi CP): Feed cost for PDH units (Monthly · Saudi Aramco)

India

India had about 8.8 Mt of ethylene nameplate capacity in 2024-25; how much propylene comes with it depends on the feed each complex cracks, naphtha giving far more than gas.

Sources

  1. Energy and Environmental Profile of the U.S. Chemical Industry, Chapter 2: The Ethylene Chain, US Department of Energy (EERE) (2000)
  2. Propylene: production routes and market, Chemical Market Analytics (OPIS)
  3. WPC 2023: Propylene slump until 2025, Chemical Week (2023)
  4. Growing U.S. petrochemical demand for ethane and propane, US Energy Information Administration (2015)
  5. Global ethylene demand rises, India expands capacity, prices drop sharply in 2018 to 2025, Alchem Pro (2025)