HOUSTON (ICIS)--US July propylene contracts settled for a majority of the market at a rollover from the prior month, although one seller did not accept the settlement, market sources said on Friday.
The July settlement keeps contract prices for polymer-grade propylene (PGP) at 59.0 cents/lb ($1,301/tonne) and for chemical-grade propylene (CGP) at 57.5 cents/lb.
The July settlement follows significant increases for propylene contracts in the last two months, which were driven by snug supply as production was limited and demand remained fairly strong.
In recent weeks, the propylene market have become more balanced amid improved production and lower demand.
Propylene production from refineries and propane dehydrogenation (PDH) units has improved, although production remains limited from crackers due to low ethylene prices and tight cracker margins.
Refinery operating rates have improved following spring turnarounds, with rates remaining above 90% for the past several weeks. Propylene inventory levels have risen during July after falling during June.
The recent increases in propylene prices has caused demand to slip as downstream markets turn to inventories and consider imports where available. The fall-off in propylene demand so far is less extreme than following a price spike in early 2018.
US propylene contracts are typically settled during the month for the current month.
Major US propylene producers include Chevron Phillips Chemical, ExxonMobil, Flint Hills Resources and Shell Chemical.
Major buyers include Arkema, Ascend Performance Materials, Braskem, Dow Chemical, INEOS, Oxea and Total.
Picture of polypropylene (PP) bottle by PhotoAlto/REX/Shutterstock