06 June 2013 16:50 [Source: ICIS news]
HOUSTON (ICIS)—US June propylene contracts are expected to move higher on rebounding demand, sources said on Thursday.
A producer has nominated a 3 cent/lb ($66/tonne, €50/tonne) for June, which would put contracts for polymer-grade propylene (PGP) at 65 cents/lb and contracts for chemical-grade propylene (CGP) at 63.5 cents/lb.
The nomination is supported by recent spot trades for June material, which have been done twice in the past week at 62 cents/lb as front-month material.
Earlier, when June was the forward month for PGP, deals were heard done between 61.75-62.00 cents/lb, lending support to the increase.
Spot PGP has been moving up as buyers returned to the market following a pullback after February propylene contracts settled at a 2013 high of 79 cents/lb.
After buyers retreated from the market, contracts shed 17 cents/lb, although May contracts fell by just 1 cent/lb, which suggested to some buyers that a floor had been reached.
Additionally, spot prices for refinery-grade propylene (RGP), which can be used to make PGP, have been moving up.
Spot RGP prices were between 45-51 cents/lb in April, but have moved to 55-56 cents/lb in June.
Some of the increase is related to more demand for PGP, while some is related to demand for gasoline production.
Market players said the increase in RGP and PGP will be slightly slowed by concerns about the economy and continued strong supply.
Typically, US propylene contracts settle toward the start of a month for that month.
Major US producers of CGP and PGP include Chevron Phillips Chemical, ExxonMobil, LyondellBasell, Petrologistics and Shell Chemical.
Major buyers include Ascend Performance Materials, Dow Chemical, INEOS and Total.
($1 = €0.76)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections