HOUSTON (ICIS)--US polymer-grade propylene (PGP) spot prices continued weakening as inventory levels continued to increase.
US spot polymer-grade propylene (PGP) was assessed on Friday at 38.00-38.50 cents/lb ($838-849/tonne), compared with 40.75-46.50 cents/lb in the previous week.
Propylene production has increased in recent weeks from refineries and crackers, two of the largest sources of propylene production in the US.
Refinery operating rates rebound to above 95% in November following the completion of autumn turnaround which prepared refiners to produce winter fuel grades.
Propylene production has improved from crackers following the restart of a cracker after a turnaround and an increase in heavier cracker feedstocks, which produce higher percentages of co-products like propylene.
Recent reductions in upstream crude oil costs has reduced the cost-gap between ethane and heavier feedstocks like naphtha, propane and butane, although ethane remains the most common US cracker feedstock.
The lower upstream crude oil and propane costs also lower production costs for propylene produced in refineries and propane dehydrogenation (PDH) units.
Meanwhile, a seasonal slowdown in demand amid year-end de-stocking also has allowed inventory levels to build.
Data showed US propylene inventory levels at the end of November were at their highest level since 2016.
Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.