11 April 2013 17:54 [Source: ICIS news]
HOUSTON (ICIS)--The US April propylene contract reached a full settlement at a drop on weaker demand, sources said on Thursday.
Buyers and sellers confirmed that US April propylene contracts shed 10 cents/lb ($220/tonne, €167/tonne) from March levels.
This puts polymer-grade propylene (PGP) at 63 cents/lb and chemical-grade propylene (CGP) at 61.5 cents/lb.
The contract settlement is in line with drops in spot PGP, which have fallen by 9-10 cents/lb in the past month, putting values in the low-60s cents/lb.
The drop in spot prices was mostly the result of weak demand from the polypropylene (PP) market.
Demand was weak from the PP market because buyers felt prices were too high, as February PGP contracts were settled at 79 cents/lb.
US PGP contact prices are still up by 5 cents/lb this year despite a 16 cent/lb drop in the past two months.
This pushed PGP buyers to the sidelines in an effort to draw down inventories and push the price lower.
Additionally, supplis of propylene has started to increase, with US inventories increasing by 17% in the past month.
Typically, US propylene contracts are settled at the start of the month for the rest of the month.
Major US producers of PGP and CGP include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell, PetroLogistics and Shell Chemical.
Major buyers include Ascend Performance Materials, Dow Chemical, INEOS and Total.
($1 = €0.76)
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