27 September 2010 22:33 [Source: ICIS news]
HOUSTON (ICIS)--A US propylene producer nominated a rollover for October, market sources said on Monday, pointing to renewed stability in the monomer market following an 8% increase in the past two months.
US polymer-grade propylene (PGP) in September settled at 60.00 cents/lb ($1,323/tonne, €979/tonne), rising by 2.50 cents/lb from August, while chemical-grade propylene (CGP) contracts were agreed at 58.50 cents/lb, also up by 2.50 cents/lb.
The increase in September was the second in as many months as US contracts had already risen by 2.00 cents/lb in August on the back of firm demand and snug supply.
The flat nomination for October was indication that demand for propylene could be slowing down, particularly on the CGP side, a market source said, adding that year-end inventory reduction was also likely at play.
But sources also cited the imminent start-up of Petrologistics’ new propane dehydrogenation (PDH) plant in Texas as another factor that could be putting some pressure on the monomer.
The PDH unit, the only one of its kind in the US, will produce CGP and PGP.
Petrologistics was expected to launch operations in late July, but the start-up was delayed to the end of August and then to early and mid-September.
The company planned to bring the 544,000 tonne/year unit on stream this week, a company official said on Friday.
US propylene contracts usually settle at the beginning of the month being negotiated.
At least two more producers could step out with nominations for October in the coming days.
Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical are among the major US producers of PGP and CGP.
Dow Chemical, INEOS, Ascend Performance Materials and Total are among the main buyers.
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