18 January 2013 15:36 [Source: ICB]
Correction: In the ICIS news story headlined "US propylene contracts for January settle 15 cents/lb higher" dated 17 January 2013, please read in the fifth paragraph …up 36% from 53.25 cents/lb in mid-November… instead of … up 36% from 53.25 cents/lb in mid-December…. A corrected story follows.
US propylene contracts rose by 15 cents/lb ($331/tonne, €248/tonne) for January, lifted by a surge in spot prices in the past few weeks and strong demand, market sources said on 15 January. The 26% increase puts polymer-grade propylene (PGP) contracts at 73.00 cents/lb and chemical-grade propylene (CGP) contracts at 71.50 cents/lb.
A large increase for January had been expected after spot prices surged on the back of plant outages, including an unexpected shutdown at PetroLogistics' propane dehydrogenation (PDH) plant in Houston, Texas, in December. The 544,000 tonne/year plant restarted the week ended 11 January.
Several US crackers also have experienced unplanned shutdowns since December.
US producers originally had nominated increases of 11.50 and 13.00 cents/lb for January, but one of the those suppliers later bumped the initiative to 15.00 cents/lb as spot prices continued to rise.
PGP for January traded on 14 January at 72.25 cents/lb, up 36% from 53.25 cents/lb in mid-November, while refinery-grade propylene (RGP) traded at 69.00 cents/lb on 15 January, rising by nearly 40% from deals done at 49.50-50.00 cents/lb four weeks earlier.
The surge in the price of RGP, which accounts for about 60% of the US propylene market, stems in part from tighter supply, which dropped to a 15-month low in the first week of January after inventories fell by 7% from a week earlier, according the Energy Information Administration (EIA).
Attention now will quickly shift to February, but sources said the outlook for next month is unclear, noting that it is too soon to tell how the January increase will affect demand.
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