US spot propylene closes week slightly down after rebound

13 September 2013 20:49  [Source: ICIS news]

HOUSTON (ICIS)--US spot propylene prices ended the week slightly lower on average from a week ago based on a deal completed on Friday.

US spot polymer-grade propylene (PGP) traded at 66.5 cents/lb ($1,466/tonne, €1,100/tonne) on Friday, putting the range for the week ended 13 September at 63.5-66.5 cents/lb.

This was wider and slightly lower than the previous week’s price levels, which were at 65.5 cents/lb based on a lone trade.

“Trading was very choppy this week,” a producer said. “When it went low, that was against [what] I was expecting.”

Material traded at 63.5 cents/lb on 9 September, a fall of 2 cents/lb from trading done on 6 September.

On 10 September prices rebounded, with trades done between 64.375-64.625 cents/lb, and moved higher again with a trade at 66.000 cents/lb the next day.

The rebound in spot prices put PGP values closer to where most market players expected them to be.

“We were surprised with the lower trades,” a trader said. “It’s possible demand wasn’t as strong as some projected it.”

By the end of the week, however, sources agreed that PGP demand is strong, mostly backed by the downstream polypropylene (PP) market.

One propylene market player said that the rise in PGP has not created a similar rise in refinery-grade propylene, which can be used as a feedstock.

The source said that propylene splitters, which use RGP to make PGP, could be looking to restore the typical margin of 8-10 cents/lb.

For most of August, PGP was 6-7 cents/lb higher than PGP.

US September RGP traded during the week between 56.5-57.5 cents/lb, and closed Friday 6.5-11.5 cents/lb lower, based on bid/offer levels.

($1 = €0.75)

By: John Dietrich

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