US propylene for July falls 4 cts/lb in partial settlement

11 July 2011 22:53  [Source: ICIS news]

Four centsHOUSTON (ICIS)--US propylene contracts for July began to settle on Monday at a 4 cent/lb ($88/tonne, €62/tonne) decrease, following pressure from lower spot prices in recent weeks.

The initial settlement puts polymer-grade propylene (PGP) at 78.00 cents/lb and chemical-grade propylene (CGP) contracts at 76.50 cents/lb.

The drop is in line with market projections of a 3-5 cent/lb decrease, but one source said not all sellers were willing to agree to the settlement because of concerns over rising alkylation levels in gasoline.

Alkylation levels can influence the price of refinery-grade propylene (RGP), which accounts for around 60% of the US propylene market.

Refineries can use RGP as an alkylate in gasoline or sell the product to the chemical market, depending on which side is paying more for it.

RGP spot prices were assessed on Friday at 68.00-68.50 cents/lb, while alkylation levels were at around 72 cents/lb, up by 4 cents/lb from a week earlier as a result of higher gasoline prices.

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, Petrologistics and Shell Chemical.

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

($1 = €0.70)

For more on propylene visit ICIS chemical intelligence

By: William Lemos
+1 713 525 2653

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