By Malini Hariharan
After seeing very strong pricing for the last few months US propylene and polypropylene (PP) buyers have started talking of imminent correction.
PP buyers expect a 7-10cent/lb ($154-200/tonne) drop in May prices, reports ICIS news.
The prediction is based on improved propylene availability.
Earlier this week the US Energy Information Administration (EIA) released data that showed a 12% increase in propylene stocks for the week ended 16 April. The increase came amid higher US refinery operating rates – 85.9% compared with 78.4% in the second week of January.
And the US is now even looking at exporting propylene with one cargo reportedly settled for early May shipment to Europe.
Propylene contract prices had moved up by over 50% in the last six months but a significant drop in May contracts is now being predicted.