OREANDA-NEWS. October 21, 2014. The startup of two more propane dehydrogenation plants in China by mid-2015, coming on the heels of the four facilities that have begun operations over the past year, will exacerbate Asia's propylene glut and likely force the newcomers to curb output to defend their margins, according to industry sources.

Some of the new plants may also be forced to continue reselling their contracted propane cargoes, in the hope of capitalizing on steady prices for offloading unwanted the feedstock during the winter (November through February), sources said.

In total, the six new PDH plants will be able to produce 3.51 million mt/year of propylene.

Yantai Wanhua Polyurethanes is set to start up China's single-biggest PDH plant, located in Shandong province, next January or February, according to a source familiar with the matter.

The new plant will be able to produce up to 750,000 mt/year of propylene and will consume up to 900,000 mt of propane and 600,000 mt of butane annually.

The company had scheduled to commission the plant in December, though the source said the early-2015 startup is still in line with its original plan.

The jetty for the facility is ready and the giant storage cavern with a 1 million cubic meter capacity is set to be completed in December, he said.

The source added that Wanhua's first cargo will be pressurized LPG for gassing-in purposes at the plant.

Other industry sources said the company has bought its first propane cargo for early-January arrival.

Oriental Energy now aims to start its 660,000 mt/year PDH plant in Jiangsu province around end-2014 or early-2015, according to another source familiar with that project, though others said the plant may not start until mid-2015.

It had previously planned to launch phase one of the facility in the second half of 2014, a company source said in April. The most recent startup, the 450,000 mt/year Shaoxing Sanyuan Petrochemical plant owned by China's top propylene importer, has been producing chemical-grade propylene since September 12.

It is unclear if the plant is producing polymer-grade propylene yet, although a company source had said it was due to start last week.