US Feb propylene initially settles down 1 cent/lb on soft demand

HOUSTON (ICIS)–US February propylene contracts reached an initial settlement that fell slightly on Wednesday, sources confirmed, tracking softer demand.

The 1.0 cent/lb ($22/tonne) decline puts February polymer-grade propylene (PGP) at 73.5 cents/lb and February chemical-grade propylene (CGP) at 72.0 cents/lb.

Sources were expecting a drop of 1-2 cents/lb because of a drop in spot PGP fuelled by weaker demand and increasing inventories.

US spot PGP prices have shed 2.25-3.25 cents/lb in the past two weeks as buyers retreated from the market because of high prices.

Successful inventory building in the second half of January allowed buyers to sit on the sidelines and wait for lower spot prices to push down on contract prices.

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.