19 April 2012 20:54 [Source: ICIS news]
HOUSTON (ICIS)--US April propylene contracts settled at a rollover to March levels, market sources said on Thursday, lower than nominations heard at the start of the month.
This puts April polymer-grade propylene (PGP) at 77.50 cents/lb ($1,709/tonne, €1,299/tonne) and April chemical-grade propylene (CGP) at 76 cents/lb.
“It settled flat today, but at this point in the month, it is not like that is really going to spur anybody to do anything they were not already going to do,” a trader said. “There is just no demand at these [price] levels. April is going to be a brutal month.”
Two US producers proposed price increases of 2 and 5 cents/lb, on the back of high gasoline alkylation values and tight supply because of the US cracker turnaround season.
However, the 5 cent/lb nomination received very little traction, sources said.
US propylene contracts typically settle at the beginning of the month being negotiated.
However, April negotiations were slowed by buyer pushback, based on weak demand from the chemical markets.
“Weak demand is absolutely the biggest driver for the rollover,” a buyer said.
Spot PGP prices have dropped throughout April, falling to 69.75 cents/lb on Thursday, down from 78 cents/lb at the start of the month, as assessed by ICIS.
Demand from the polypropylene (PP) market remains soft, with buyers staying out of the market and buying on a hand-to-mouth basis.
Propylene supply is also mixed, with some sources citing limited availability because of the US cracker turnaround season, and other sources saying material is not difficult to find because high prices have pushed away numerous buyers.
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 = €0.76)
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