07 February 2011 21:59 [Source: ICIS news]
HOUSTON (ICIS)--US propylene contracts began to settle at a rollover, market sources said on Monday, indicating a recent drop in spot prices outweighed proposed increases sought by US producers.
According to sources, one US producer agreed to a flat settlement that would keep polymer grade propylene (PGP) at 77.50 cents/lb ($1,709/tonne, €1,265/tonne).
The producer and a rival supplier had nominated increases of 3.00 cents/lb for PGP in February, but those initiatives lost some momentum after spot prices began to soften.
Spot PGP for February delivery traded at 75.00 cents/lb in the last week of January, down from 75.50 cents/lb two weeks earlier.
Market sources said the same producer settled chemical-grade propylene (CGP) at 74.00 cents/lb, also unchanged from January.
The supplier had initially nominated an increase of 5.00 cents/lb for CGP, which in January settled at 70.00 and 74.00 cents/lb after a drawn-out and unusual split settlement.
The initial flat settlement for US propylene follows a massive increase in January, when PGP contracts rose by 17.00 cents/lb and CGP by 11.00 and 15.00 cents/lb.
The sharp increase in January stemmed from tight supply and higher spot prices, including a 42% surge in refinery grade propylene (RGP) spot prices in December.
Major US producers of PGP and CGP include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell, Petrologistics and Shell Chemical.
The main buyers include Dow Chemical, INEOS, Ascend Performance Materials and Total.
($1 = €0.74)
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