US April propylene contracts initially settle down 6 cents/lb

Tracy Dang

10-Apr-2015

US April propylene settling downHOUSTON (ICIS)–US propylene contracts for April have started to settle at a decrease of 6 cents/lb ($132/tonne), several market sources said on Friday.

If the initial settlement is fully accepted, it would put April polymer-grade propylene (PGP) prices at 43.0 cents/lb and chemical-grade propylene (CGP) prices at 41.5 cents/lb.

The 6-cent/lb drop is much steeper than 1-cent/lb decrease initially nominated by one producer. Buyers had been expecting the drop to be closer to 2-4 cents/lb.

Spot activity for April PGP had been thin during the week as market participants were waiting for other contract nominations.

However, a trade was heard done on Friday at 40.5 cents/lb, and offer levels fell below 40 cents/lb, providing further support to the lower settlement.

Market sources said that supply remains stable-to-long, and inventories are high.

Meanwhile, demand continues to be viewed as soft on downstream production issues and weak export demand.

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

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

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