HOUSTON (ICIS)--US November propylene contracts are expected to settle at a slight decline despite a nomination for a rollover, sources said on Tuesday.
One producer nominated a rollover for November contracts and another nominated a decline of 0.5 cent/lb ($11/tonne, €8/tonne), sources said.
October contracts for polymer-grade propylene (PGP) settled at 67.5 cents/lb and chemical-grade propylene (CGP) contracts settled at 66.0 cents/lb.
Buyers and traders said they expect a decline of 1-2 cents/lb for November contracts.
“I don’t think suppliers will agree to more than 1 cent/lb this time,” a buyer said. “But we shall see.”
Spot PGP ended October at 63.875-64.000 cents/lb after a small rally in the second half of the month.
With US propylene contracts typically settling 2-3 cents/lb above the latest spot prices, this would put November PGP at 66.0-67.0 cents/lb and CGP at 64.5-65.5 cents/lb.
The late-month rally in October was largely supported by bargain buying from traders and speculators, sources said.
“Low prices often cure low prices,” a producer said.
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)