14 April 2014 22:55 [Source: ICIS news]
HOUSTON (ICIS)--US April propylene contracts have fully settled at a slight decline, sources confirmed on Monday.
The drop of 1.0 cents/lb ($22/tonne) puts April polymer-grade propylene (PGP) contracts at 71.0 cents/lb and April chemical-grade propylene (CGP) contracts at 69.5 cents/lb.
The settlement was largely in line with market expectations, as one producer nominated a rollover.
The decline was mostly driven by weaker spot PGP prices, which shed about 1.5-2.0 cents/lb between the two settlements.
US propylene contracts often settle 2-3 cents/lb above the most recent PGP spot trading levels.
Sources said that the US propylene market remains mostly steady, with buyers and sellers attempting to hold out for preferred pricing levels.
PGP buyers, especially in the polypropylene (PP) sector, are said to have balanced inventory levels that will need to be replenished soon as summer construction demand ramps up.
However, current demand levels are soft enough to allow PP producers to buy hand-to-mouth until PGP prices bottom out.
But PGP producers do not have high inventory levels and are feeling little pressure to sell, allowing them to keep the decline in contracts moving at a slow rate.
There is also not much pressure on PGP from the feedstock refinery-grade propylene (RGP) market, as prices have been up and down on supply issues and increasing gasoline production.
Major US propylene producers include Chevron Phillips Chemical (CP Chem), Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical.
Major buyers include Ascend Performance Materials, Dow Chemical, INEOS and Total.
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