28 October 2008 19:28 [Source: ICIS news]
HOUSTON (ICIS news)-- A US propylene (C3) buyer on Tuesday revised his contract nomination for November to a 30 cent/lb ($661/tonne or €529/tonne) reduction from a 20 cent cut amid weaker demand, lower feedstock costs and a slump in US propylene spot prices.
The buyer decided to seek a bigger decrease due to a sharp decline in the market, as indicated by a plunge in US refinery-grade propylene (RGP) spot prices, according to a market source.
Spot RGP for November traded on Monday at 21 cents/lb, down from an October deal done at 40 cents/lb only 10 days before.
RGP is used as a feedstock for several chemicals, including higher-purity chemical- (CGP) and polymer-grade (PGP) propylene. Spot RGP traded at about 80 cents/lb in mid-July.
Other US buyers were also expected to seek steep decreases for propylene in November.
A consumer put the reduction at a minimum of 20 cents/lb, while another buyer vowed to push for a 20-30 cent/lb reduction.
One US producer said a decrease in that range “was not out of question”.
“The market is what it is,” the source said, adding that the US propylene market needed to remain competitive with Asia and Europe.
Total, Solutia, Dow Chemical, Rohm and Haas and INEOS are among the main buyers.
Equistar, ExxonMobil, Chevron Phillips Chemical, Shell Chemical and Enterprise Products are among the major US producers of PGP and CGP.
($1 = €0.80)
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