13 September 2013 20:48 [Source: ICIS news]
NEW YORK (ICIS)--US monopropylene glycol (MPG) contract values for September were assessed on Friday by ICIS up by 3-5 cents/lb ($66-110/tonne, €50-83/tonne) from August values on a combination of producer-led price increases and formula-based pricing.
Producers raised their prices for industrial-grade propylene glycol (PGI) and pharmaceutical-grade propylene glycol (PGUSP) by 5 cents/lb, effective 1 September.
These full 5 cent/lb increases by Dow Chemical, Huntsman and LyondellBasell were successful, a market participant said.
The September PGI contract range was assessed at 85.65-90.65 cents/lb FOB (free on board), while the September PGUSP contract range was assessed at 91.65-96.65 cents/lb FOB.
In comparison, September formula-based contracts increased about 3 cents/lb.
The September antifreeze-grade propylene glycol (PGAF) was assessed at 79.00-85.65 cents/lb FOB, and the September MPG export contract price range was assessed at 73.65-75.65 cents/lb FOB on formula-based correlations to the upstream August propylene settlement.
MPG contracts are strongly influenced by the delta of the previous month’s propylene contract price and generally follow formula-based pricing.
Formula pricing can be equivalent to two-thirds of the monthly delta of propylene or two-thirds of the propylene contract price plus an adder number, depending on which formula market participants use.
MPG trends also take into account monthly pricing based on negotiations between buyers and sellers that are not dependent on the formula pricing.
Demand in the US market is healthy at this time, which supports the movement toward higher prices, market sources said.
US MPG producers include Dow, LyondellBasell, Huntsman, Eastman and Archer Daniels Midland.
($1 = €0.75)
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