Producer seeks 1 cent/lb hike for US March propylene

HOUSTON (ICIS)–A US propylene producer nominated its March contracts for a 1 cent/lb ($22/tonne) increase, sources said on Friday.

Earlier in the week, another US producer nominated its March contracts at an increase of 1.5 cents/lb.

Sources said propylene producers are pushing for increases on tighter supply, as crackers have started shifting toward lighter feeds in light of increased propane and naphtha values.

Additionally, supply of polymer-grade propylene (PGP) from refinery-grade propylene (RGP) could tighten as RGP sellers continue to build inventory rather than sell material.

US propylene buyers are arguing that continued increases in propylene will cause demand destruction, especially as overseas propylene and derivative prices fall.

February polymer-grade propylene (PGP) contracts settled at 50.5 cents/lb, while February chemical-grade propylene (CGP) contracts settled at 49.0 cents/lb.

Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical.

Major US buyers include Ascend Performance Materials, Braskem, Dow Chemical, INEOS and Total.