AFPM ’14: US propylene market stable on firm floor, ceiling

30 March 2014 13:15  [Source: ICIS news]

HOUSTON (ICIS)--The US propylene market remains steady as market players wait for a more clear direction ahead of the American Fuel & Petrochemical Manufacturers’ (AFPM) International Petrochemical Conference (IPC).

Sources said that conflicting market dynamics in the refinery-grade propylene (RGP) and polymer-grade propylene (PGP) markets have put prices in a slight stalemate.

US RGP spot prices have been firm in the low 60s cents/lb level, although they started to fall slightly at the end of March.

Sources said that supply was tight during much of the month and is expected to remain so into April because of several refinery turnarounds, as well as gasoline production switching to summer blends from winter blends.

RGP inventories have also been slightly higher year over year, and remain long enough to outweigh alkylation values that have been above 70 cents/lb ($1,543/tonne) for most of 2014.

The tight supply of RGP has kept prices firm and placed a floor on PGP prices, which have been in the high-60s cents/lb for most of March.

Sources said that the PGP market is also balanced, with buyers having healthy inventory levels and waiting for prices to come down to more attractive levels.

PGP buyers have said that downstream polypropylene (PP) remains unattractive to export because of its high prices in the global market, which has weakened demand.

Sellers of PGP do not have high inventories, sources said, and are not eager to sell at lower prices just to move material.

PGP sellers are also waiting to see how supply and inventories are affected by the coming US cracker turnaround season, which could tighten PGP supply and allow them to push prices back above the 70 cent/lb level.

Major US propylene producers include Chevron Phillips, ExxonMobil, LyondellBasell, PetroLogistics and Shell Chemical.

Major buyers include Ascend Performance Materials, Dow Chemical, INEOS and Total.

By: John Dietrich

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