24 September 2012 22:42 [Source: ICIS news]
HOUSTON (ICIS)--US propylene contracts for September rose by 1 cent/lb ($22/tonne, €17/tonne), market sources said on Monday, confirming settlements reached late last week.
The increase puts polymer-grade propylene (PGP) contracts in September at 51.50 cents/lb and chemical-grade propylene (CGP) contracts at 50.00 cents/lb.
US propylene contracts normally settle at the beginning of the month being negotiated, but the settlement for September was delayed because of divergent views on price direction among buyers and sellers.
US producers had originally nominated increases of 4 cents/lb and 2.50 cents/lb for September as a result of higher spot prices at the turn of the month.
While higher spot prices would normally translate into a contract increase, one source said some settlement participants resisted taking spot price changes into account as a basis for the settlement, arguing that some transactions done in recent weeks were the result of trader activity and did not reflect supply/demand fundamentals.
PGP price trends also retreated slightly as negotiations were taking place, fuelling buyers' resistance against an increase.
September PGP was bid on Monday at 48.50 cent/lb against a 53.50 cent/lb offer. The monomer traded at 50.25 cents/lb last week, down from 53.375 cents/lb in the first week of September.
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 = €0.77)
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