09 October 2013 17:01 [Source: ICIS news]
HOUSTON (ICIS)--US October propylene contracts reached a full settlement at a decline of 2.5 cents/lb ($55/tonne, €41/tonne), sources confirmed on Wednesday.
The settlement puts US October polymer-grade propylene (PGP) at 67.5 cents/lb and October chemical-grade propylene (CGP) at 66.0 cents/lb.
The settlement came after two US producers separately nominated declines of 1 cent/lb for October contracts.
Sources said the biggest reason for the fall in contract prices was a decline in spot prices, which shed 2.5-3.0 cents/lb since the September contract settlement.
However, several sources were surprised that spot prices declined, as demand was steady to strong for most of September.
Supply was also steady, sources said, but appeared set to tighten on the shutdown of PetroLogistics’s Houston propane dehydrogenation (PDH) unit in Texas at the end of September.
Sources said that the decline in feedstock costs was also a small factor, as US propane prices shed 7 cents/gal in September and paraffinic naphtha fell by $90.5/tonne.
US propylene contracts are typically settled at the start of a month for that month.
Major US propylene producers include Chevron Phillips Chemical, ExxonMobil, LyondellBasell, PetroLogistics and Shell Chemical.
Major buyers include Ascend Performance Materials, Dow Chemical, INEOS and Total.
($1 = €0.74)
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