10 August 2012 16:41 [Source: ICIS news]
HOUSTON (ICIS)--US propylene contracts for August were fully settled at a reduction of 1.50 cents/lb ($33/tonne, €27/tonne), market sources said on Friday.
The nearly 3% drop, which came on the heels of a decline in spot prices, 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 support for a flat settlement eroded after a recent drop in PGP spot prices.
The monthly contract is typically priced at 2-3 cents/lb above PGP 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 US contract for August 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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