US propylene inventories fall 6.1% on drop in production

20 February 2014 20:32 Source:ICIS News

HOUSTON (ICIS)--US propylene inventories fell 6.1% during the week ended 14 February, according to data released on Thursday from the US Energy Information Administration (EIA).

The EIA said inventories of non-fuel refinery-sourced propylene fell to 3.499m bbl for the week ended 14 February, down from 3.726m bbl the previous week.

Some of the decline stemmed from US refinery operating rates falling to 86.8% from 87.1% during that time frame.

Additionally, gasoline prices have increased in February, pushing alkylation values for refinery-grade propylene (RGP) higher.

This has likely led to more RGP going into the gasoline pool rather than into chemical production.

Demand for RGP from the chemical sector has also been steady because of softer demand for polymer-grade propylene (PGP).

US propylene inventories are 20% higher year on year from 2.917m bbl for the week ended 15 February.

The longer supply has helped keep alkylation values - which have risen to the 70s cents/lb level in recent weeks - from being charged in full in the US market.

US RGP for February was heard bid at 59.5 cents/lb ($1,312/tonne) on Thursday against no fresh offers.

EIA

February 14

February 07

January 31

January 24

Propylene inventories (m bbl)

3.499

3.726

3.757

3.715

Refinery operating rates (%)

86.8

87.1

86.1

88.2

By John Dietrich