27 April 2010 22:46 [Source: ICIS news]
HOUSTON (ICIS news)--A US propylene (C3) seller offered to cut May contracts by 6 cents/lb ($132/tonne, €99/tonne), but buyers on Tuesday predicted the monomer would fall by twice that amount, citing a recent plunge in the spot market.
US propylene spot prices dropped sharply in April, reversing months of continued increases on the back of weaker demand and increased supply.
The softening became clear late last week when refinery-grade propylene (RGP), a key component in the cost structure of ?xml:namespace>
Spot RGP for April last traded at 39.00 cents/lb on 23 April, down from 47.75 cents/lb on 16 April. The product began April trading at 58.00-58.75 cents/lb.
The RGP collapse fuelled buyers’ expectations of a large May contract drop for
One consumer described the proposed 6-cent/lb reduction for May as laughable, while another deemed it not as large as originally expected.
“I was thinking maybe it would go down by more than 10 cents/lb because of the big difference between RGP and polymer-grade propylene (PGP),” the source said.
PGP in April settled at 75.50 cents/lb, up by 7 cents/lb from March, while chemical-grade propylene (CGP) rose by the same amount to 74.00 cents/lb, according to global chemical market intelligence service ICIS pricing.
US propylene contracts usually settle at the beginning of the month being negotiated. At least two more producers could step out with May nominations in the coming days, sources said.
Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical are among the major
Dow Chemical, INEOS, Ascend Performance Materials and Total are among the main buyers.
($1 = €0.75)
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