Corrected: US propylene producer seeks 3.5 cent/lb December hike

30 November 2010 04:04  [Source: ICIS news]

Correction: In the ICIS news story headlined "US propylene producer seeks 3.5 cent/lb December hike" dated 30 November 2010, please read in the first paragraph …Monday… instead of …Tuesday…. A corrected story follows.

HOUSTON (ICIS)--A US propylene producer nominated an increase of 3.5 cents/lb ($77/tonne, €59/tonne) for December, market sources said on Monday, pointing to limited supply as a factor for rising monomer prices.

The proposed 3.5 cent/lb increase for December followed a nomination for a 3.00 cent/lb hike by another supplier last week.

November polymer-grade propylene (PGP) contracts settled at 57.50 cents/lb, while chemical-grade propylene (CGP) was agreed at 56.00 cents/lb.

A third US producer was expected to step out with its December initiative this week.

That supplier is also likely to push for an increase.

Limited supply and rising refinery-grade propylene (RGP) spot prices in November were among the factors supporting the higher contract prices, market sources said.

December RGP traded on Monday at 49.50 cents/lb, up from 46.25-46.50 cents/lb in the first week of November.

RGP is a key indicator for trends on the contract side because the product accounts for around 60% of US propylene supply.

US propylene contracts usually settle at the beginning of the month being negotiated.

Major US producers of PGP and CGP include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical.

Main buyers include Dow Chemical, INEOS, Ascend Performance Materials and Total.

($1 = €0.76)

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By: William Lemos
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