OREANDA-NEWS. Dow Chemical is producing on-specification polymer grade propylene (PGP) for commercial sale at its new 750,000 t/yr (1.7bn lb/yr) propane dehydrogenation (PDH) unit in Freeport, Texas, the company told Argus today.

The unit is not yet running at full capacity and Dow is steadily increasing rates over the near-term.

PDH units produce on-purpose PGP using propane as a feedstock.

PDH profit margins narrowed in 2015. Outright spot PGP in Mont Belvieu, Texas, last traded at 29.25?/lb on 14 December, and was last assessed at 28.875?/lb based on bids and offers in the spot market. That's down 44pc from 51-52?/lb at the start of 2015. At the same time, spot propane opened the year trading at 39.25-40.375?/USG, 18pc lower than the start of 2015.

The addition of the PDH unit is likely to pressure PGP prices lower this year before new downstream derivative capacity is brought online.