12 August 2011 21:19 [Source: ICIS news]
HOUSTON (ICIS)--US propylene contracts for August began to settle flat on Friday, pressured by a drop in energy prices in the past two weeks.
US producers had originally sought a 3 cent/lb increase for the month, but buyers resisted the initiative and pushed for a rollover after crude oil prices started to falter.
Market sources said that, except for one supplier, all settlement participants had agreed to the rollover.
The settlement keeps polymer-grade propylene (PGP) at 78 cents/lb ($1,720/tonne, €1,204/tonne) and chemical-grade propylene at 76.50 cents/lb.
US propylene contracts usually settle at the beginning of the month being negotiated.
Upstream, crude oil prices ended 1.7% down for the week for a monthly drop of around 10%.
Market activity this week centred on renewed jitters about the global economy, following the US credit downgrade by Standard & Poor's.
In the spot market, refinery-grade propylene (RGP) for August traded at 68 cents/lb this week, at the low end of deals done at 68-70 cents/lb during the week ended 5 August.
RGP was bid at 67.75 cents/lb on Friday against a 70 cent/lb offer. PGP bid/offers were last heard at 74-80 cents/lb.
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)
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