03 October 2011 15:25 [Source: ICIS news]
BERLIN (ICIS)--US propylene contracts for October could drop by up to 13 cents/lb ($287/tonne, €215/tonne), a market participant said on Monday, citing a recent build-up in refinery-grade propylene (RGP) inventories.
US propylene stockpiles rose by 4% to 3.196m bbl in the third week of September to their highest level in 14 months, according to data from the Energy Information Administration (EIA).
The build-up in RGP will probably push October contracts down by 11–13 cents/lb, the source said on the sidelines of the 45th annual European Petrochemical Association (EPCA) meeting.
RGP accounts for 60% of the US propylene market. The product traded last week as low as 55 cents/lb, down from 64 cents/lb a week earlier.
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 were poised for a potential double-digit drop in October gained momentum last week after RGP prices fell sharply and a CGP producer nominated an 8 cent/lb drop for the month.
($1 = €0.75)
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