HOUSTON (ICIS)--Initial settlements for US January propylene contract prices are at a 9 cent/lb ($198/tonne) increase from the prior month, market sources said on Wednesday, although the settlement is not yet marketwide.
If fully accepted, the settlement would put January contract prices for polymer-grade propylene (PGP) at 59.0 cents/lb, up from 50.0 cents/lb in December, and for chemical-grade propylene (CGP) at 57.5 cents/lb, up from 48.5 cents/lb in December.
The contract price increase is in line with sharply higher spot prices amid tight supply as the market awaits the start-up of a new propane dehydrogenation (PDH) unit and the restart of an existing PDH unit.
The new PDH unit at Enterprise’s Mont Belvieu complex continues to ramp up after its start-up was delayed due to Harvey. Previously, the unit had been expected to start-up in September.
Meanwhile, an existing PDH unit at Dow Chemical’s complex in Freeport, Texas, was shut down in late December. Maintenance work on the unit could extend into February.
Another PDH unit, at the Flint Hills Resources complex in Houston, Texas, also was shut down last week after an upset. Operations at the complex have returned to normal.
Spot PGP prices have been assessed in a range of 53.0-67.5 cents/lb in January, compared with 47.5-49.5 cents/lb in December.
US propylene contracts are typically settled during the month for the current month.
Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.
Major buyers include Arkema, Ascend Performance Materials, Braskem, Dow Chemical, INEOS, Oxea and Total.