US spot PGP drops 3.1% to start week in divided market

09 September 2013 21:13  [Source: ICIS news]

US spot PGP drops 3.1% to start week in divided marketHOUSTON (ICIS)--US spot polymer-grade propylene (PGP) traded 3.1% lower on Monday from the close of the previous week despite sources saying the market is expecting higher prices soon.

US front-month PGP was done at 63.5 cents/lb ($1,400/tonne, €1,064/tonne), down from a trade done on 6 September at 65.5 cents/lb.

The recent downturn in spot PGP has surprised some market players, who said an upcoming planned turnaround was expected to push prices higher.

US PetroLogistics said it planned to put its 544,000 tonne/year propane dehydrogenation (PDH) unit into turnaround at the end of September for maintenance.

“That plant is the swing capacity, so it has a lot of influence,” a buyer said. “It might have an undue amount of influence, but it has it.”

Another buyer said that downstream polypropylene (PP) is tight, which could lead to strong demand for PGP.

However, spot PGP prices have fallen by 4 cents/lb in the past two weeks, as buying interest has been limited because of high prices.

Additionally, supply might be longer than some have calculated, as only two major US crackers are down.

Following the spot trade in the morning, US front-month PGP bid/offer levels widened, with bids heard at 62.75 cents/lb and offers heard at 68.00 cents/lb.

“There are two differing views of the marketplace,” the buyer said. “We’ll see where prices go from here.”

($1 = €0.76)

By: John Dietrich

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