US PP margins mostly rise on feedstocks

HOUSTON (ICIS)–US integrated polypropylene (PP) margins rose mostly during the week ended 22 July on declining feedstock costs, although contract margins for material based on naphtha fell for the second week in a row, the ICIS margin report showed on Monday.

Integrated PP contract margins for material based on naphtha dropped by 1.3% on a rise in feedstock costs. Naphtha contract margins are not far from the yearly low set earlier this month.

Meanwhile, PP spot margins based on naphtha increased by 2.6%, as 6.3% rise in co-product credits more than offset the naphtha costs increase.

Integrated PP contract margins based on propane dehydrogenation (PDH) rose for the fourth week in a row but just barely, up by 0.6%, as propane feedstock costs dropped about 1.0%. Spot margins also rose.

PDH contract margins have edged up near a two-month high set in early June.

Integrated PP contract margins for refinery grade propylene (RGP) increased by 1.2% during the week, as RGP feedstock costs fell back by roughly the same percentage. RGP margins remain about midway between the high and low of the past six weeks. Spot PP margins on an RGP basis also rose.

US polypropylene margins are based on the July propylene contract, which settled last week, and thus previous margin calculations for July have been revised accordingly. US PP margins are still based upon the June contract value, so they are subject to revision again upon its settlement.