15 November 2010 21:26 [Source: ICIS news]
HOUSTON (ICIS)--US November propylene contracts settled down by 1 cent/lb ($22/tonne, €16/tonne) after a hold-out supplier, which had previously pushed for a rollover, agreed to the decrease, market sources said on Monday.
The drop puts November polymer-grade propylene (PGP) at 57.50 cents/lb and chemical-grade propylene (CGP) at 56.00 cents/lb, as assessed by ICIS.
Market participants had initially expected November propylene contracts to fall by 2–4 cents/lb, but that outlook changed early in the month as a result of cracker outages and a jump in crude oil prices.
Crude oil began November trading at $82.95/bbl, but prices soared to $86.85/bbl in the first week of the month on the back of a weak dollar and a rally in the stock market.
A recent increase in refinery-grade propylene (RGP) spot prices was also cited as having limited the drop on the contract side.
November RGP traded last week at 47.25–48.25 cents/lb, up from 46.00 cents/lb a month earlier.
RGP accounts for around 60% of US propylene supply.
Market participants said RGP prices were rising in response to a downtrend in refinery-sourced propylene inventories, which in early November fell to their lowest level in 15 months.
Inventories were at 1.791m bbl in the week ended 5 November, down by 16.5% from 2.145m bbl in the first week of October, according to data from the Energy Information Administration (EIA).
($1 = €0.73)
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