US C3 August nominations at plus 5-10 cents/lb
24 July 2008 20:48 [Source: ICIS news]
HOUSTON (ICIS news)--US propylene (C3) producers have nominated August contract price increases of 5-10 cents/lb ($110-220/tonne, €70-141/tonne), market sources said on Thursday.
One producer nominated plus 5 cents/lb for chemical-grade propylene (CGP) and plus 6 cents/lb for polymer-grade propylene (PGP), a buyer said.
Another producer is seeking a 10 cent/lb increase for CGP in August, according to a different buyer.
The initial nominations shocked US buyers, most of whom had expected propylene in August to remain flat or drop slightly due to softening crude oil prices.
CGP and PGP contracts in July were assessed, respectively, at 83.50 cents/lb and 85.00 cents/lb, according to global chemical market intelligence service ICIS pricing.
That spread could increase in August based on the unusual plus 5 cents/lb (CGP) and 6 cents/lb (PGP) split nomination by a single producer for next month.
Market sources had mixed views about the initiative and its outcome.
One market participant said the timing was not adequate to push for a wider spread. “The right time to do that is in a downward market,” the source said.
However, another participant said increasing the spread made sense, as that would make CGP and PGP more comparable in price on a contained basis.
Equistar, ExxonMobil, Chevron Phillips Chemical, Shell Chemical and Enterprise Products are among the major US producers of PGP and CGP.
LyondellBasell, Total, Solutia, Dow Chemical, Rohm and Haas and INEOS are among the main buyers.
($1 = €0.64)
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By: William Lemos
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