HOUSTON (ICIS)--US May propylene contracts reached a full settlement at a slight decline, sources confirmed on Friday.
The settlement puts May polymer-grade propylene (PGP) at 70.5 cents/lb ($1,554/tonne) and May chemical-grade propylene (CGP) at 69.0 cents/lb.
Sources said the settlement was in line with market expectations after at least two producers separately nominated rollovers for the month.
The settlement means propylene contracts have fallen in each of the past four months, but have shed only 4 cents/lb during that time frame.
The stability in pricing has mostly stemmed from balanced inventory levels for buyers and sellers.
Sources said polypropylene (PP) buyers have healthy enough inventories to allow them to buy hand-to-mouth, putting downward pressure on feedstock PGP prices.
However, PGP seller inventory levels are low enough that there is little pressure on them to move material and chase sales.
Sources said that buyers have been trying to push down on PGP prices, as they are 8.5 cents/lb higher year on year for the May settlement.
However, there are expectations that demand will improve throughout May and into June once the US construction season hits full steam.
Major US propylene producers include Chevron Phillips, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical.
Major buyers include Ascend Performance Materials, Dow Chemical, INEOS and Total.