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