14 June 2013 17:55 [Source: ICIS news]
HOUSTON (ICIS)--US spot prices for refinery-grade propylene (RGP) reached a three-month high on tight supply and rebounding demand, sources said on Friday.
Market players said deals for front-month RGP have been done in the past week at 57.000 cents/lb ($1,257/tonne, €942/tonne) and 57.625 cents/lb.
This is the highest front-month RGP has been traded at since a deal done at 63.5 cents/lb on 7 March.
The rundown in spot RGP since then was largely fuelled by weak demand from the plastics market.
With RGP a possible feedstock for polymer-grade propylene (PGP), spot PGP prices fell because of demand destruction.
US RGP hit a low of 45 cents/lb in mid-April and has been steadily increasing since then.
A producer said that the summer driving season has been softer than expected, which has led to less production of gasoline.
The drop in gasoline has led to less production of RGP, tightening supply and helping push spot prices higher.
Additionally, US PGP prices reached a floor in May, sources said, attracting buyers back into the market and boosting demand for RGP.
($1 = €0.75)
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