US PP margins drop on higher feedstocks, May settlement

HOUSTON (ICIS)–US integrated polypropylene (PP) margins based on the major feedstocks fell about 2-3% during the week ending 27 May, the ICIS margin report showed on Tuesday.

The declines stemmed partly from the May US PP contract settlement, which dropped 4 cents/lb during the week, and from increasing feedstock costs. The contract settlement prompted revision of May data in the margin report.

Integrated PP contract margins based on naphtha dropped 1.59% on the contract settlement and rose about 1% in feedstock costs plus a slight decline in co-product credits.

Integrated spot PP margins fell 3.26%.

Integrated PP contract margins for refinery grade propylene (RGP) declined 2.5% on a 4.1% gain in RGP.

Standalone margins for buying spot propylene and selling contract PP slipped less than 1%, increased slightly.

Margins for standalone PP contracts and for buying contract propylene and selling export PP held steady, while standalone spot export margins dropped about 1%.

Integrated PP contract margins based on propane dehydrogenation (PDH) slipped 0.25% on propane feedstock costs that inched up 0.43%.