US Oct propylene contract negotiations ongoing

HOUSTON (ICIS)–US propylene contracts for October have yet to settle as of publication time on Friday, as market participants remain apart on how much prices will decrease for the month.

Initially, a producer nomination had emerged at an increase of 1 cent/lb, but price discussions last week had centred around a rollover to a slight decrease.

However, spot prices for front-month October polymer-grade propylene (PGP) fell on Tuesday to 38.5 cents/lb, prompting buyers to push for a larger drop in contract pricing.

Late-week contract discussions are at decreases of 1-2 cents/lb.

Sources said that the 6-cent/lb spike in September contracts has significantly reduced demand, with spot activity limited.

Front-month October PGP has traded prior to this week at 39.5-40.0 cents/lb.

US propylene contracts are typically settled in the first half of the month for the rest of the month, but settlements have been running later in the month.

Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.

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

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