US IPA drops by 8 cents/lb on market softness, weaker propylene

25 May 2012 21:07  [Source: ICIS news]

HOUSTON (ICIS)--US isopropanol (IPA) contract prices fell by an average of 8 cents/lb ($176/tonne, €141/tonne) in May, market sources confirmed on Friday.

The new IPA contract range was 80-82 cents/lb, as assessed by ICIS, pressured downward by softening market conditions.

IPA had drifted down by 3 cents/lb late in the month after indications that prices had weakened in early May by 4-6 cents/lb.

Despite relatively balanced supply and demand, sources said price weakness was due to fast-falling propylene values, lacklustre demand and the threat of cheaper imports.

IPA contract values typically move in the same direction as the previous month’s chemical-grade propylene (CGP) contract, which settled flat in April and dropped by 10 cents/lb for May.

US propylene contracts are likely headed for a significant drop in June, market sources said, citing weak demand and lower spot prices in recent weeks. CGP contracts for May fell to 66 cents/lb.

Market sources said propylene spot prices are under pressure because of a drop in demand resulting from de-stocking downstream. And propylene buyers are holding off taking in more volumes because of expectations that prices will continue to fall, a source said.

Falling crude oil prices, a weak economic outlook and trader inventory liquidation were also weighing on propylene prices, another source said.

US IPA suppliers include Sasol, Shell Chemicals, Dow Chemical, LyondellBasell and ExxonMobil.

($1 = €0.80)

By: Larry Terry
1 713 525 2653

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