02 October 2011 10:47 [Source: ICIS news]
BERLIN (ICIS)--US propylene contract prices will drop by at least 8 cents/lb ($176/tonne, €132/tonne) in October, a buyer predicted on Sunday, citing weakening demand for the monomer.
US propylene derivative demand is soft in both the domestic and export markets, the buyer said on the sidelines of the 45th annual European Petrochemical Association (EPCA) meeting in Berlin.
Propylene demand may only increase again in January as the fourth quarter is usually slower, the source said, estimating that US contracts could drop by 8–10 cents/lb this month.
US propylene contracts for September rolled over from August in a settlement that kept polymer-grade propylene (PGP) at 78.00 cents/lb and chemical-grade propylene (CGP) at 76.50 cents/lb.
Market expectation that US propylene prices are poised for a potential double-digit drop in October gained momentum last week after refinery-grade propylene (RGP) prices fell sharply and a CGP producer nominated an 8 cent/lb drop for the month.
RGP for September traded last week as low as 55 cents/lb, down from 64 cents/lb a week earlier.
Market sources attributed the drop to weakening demand, saying the US molecule was not competitive enough to keep derivative exports flowing.
RGP accounts for about 60% of the US propylene market.
($1 = €0.75)
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