22 April 2013 22:09 [Source: ICIS news]
HOUSTON (ICIS)--US spot propylene prices started to rebound slightly on Monday as a steep decline in April contracts spurred some buying interest.
US polymer-grade propylene (PGP) was done twice at 57.50 cents/lb ($1,268/tonne, €964/tonne) and once at 57.75 cents/lb, up from the low of 55.75 cents/lb seen the previous week.
US spot PGP prices had declined in five of the past seven weeks, owing to high contract prices.
The contract prices reached a high of 79 cents/lb in February, falling to 73 cents/lb in March and 63 cents/lb in April.
Buyers felt the February contract price was overdone, especially as spot prices declined following the contract settlement.
The drop in March contracts did not spur much additional buying, sources said, but April’s drop has led to some restocking of inventories.
However, with April’s fall being more than the projected decline of 6-7 cents/lb, some buyers had felt that PGP prices had more room to find bottom.
Monday’s higher PGP deals were supported by a higher deal for refinery-grade propylene (RGP), which can be used as a feedstock for PGP.
A deal for April RGP was heard at 51 cents/lb, up from a deal done the previous week at 47 cents/lb.
The softer demand for the monomer was evident in US propylene inventories increasing by 22% since the week ended 1 March, outpacing US refinery operating rates increasing to 86.3% from 82.2% in that timeframe.
Major US propylene producers 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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