09 August 2012 20:36 [Source: ICIS news]
HOUSTON (ICIS)--US propylene contracts for August began to settle on Thursday at a reduction of 1.50 cents/lb ($33/tonne, €27/tonne), pressured by a recent decline in spot prices.
The nearly 3% drop puts polymer-grade propylene (PGP) contracts in August at 50.50 cents/lb and chemical-grade propylene (CGP) contracts 49.00 cents/lb.
US propylene producers had initially nominated a rollover for August, but the prospect of a small drop gained momentum in the past two weeks because of a softening in PGP spot prices.
The PGP contract is typically priced around 2-3 cents/lb above spot prices, which softened in July as a result of looser supply and relatively low refinery-grade propylene (RGP) prices.
PGP for prompt delivery traded at 46.75 cents/lb in the first week of August, down from 49.00 cents/lb four weeks earlier.
The drop in the August contract comes after a rollover in July and two consecutive monthly reductions in May and June.
US propylene contracts normally settle at the beginning of the month being negotiated.
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 = €0.81)
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