US IPA prices face downward pressure for March on falling propylene values

Source: ICIS News


HOUSTON (ICIS)--US isopropanol prices have flattened out from February and into March but face downward pressure in the second half of this month from falling feedstock propylene values, according to market sources.

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IPA market participants previously anticipated propylene contract prices to be flat or up for February, but instead they settled lower by 1.5 cents/lb amid long supply.

Propylene spot prices continue to trend downwards as inventory levels are at record highs despite production issues.

Falling propylene values could indicate the direction for March propylene contract settlements, as contracts typically follow that month’s spot pricing.

Lower propylene prices mean increased downwards pressure on IPA. Propylene is a primary feedstock for US IPA and often a leading driver of prices.

“I think we may see some action here in the second half of the month,” one market source said in regards to IPA prices for March.

Market participants describe supply and demand for IPA as balanced, although they have seen an uptick in demand from the de-icing sector as extreme cold has plagued much of the country.

Falling propylene values are not the only feedstock weighing on prices. US February barge and truck acetone contracts also settled lower amid lower priced imports and ample supply.

Acetone-based IPA makes up only a small percentage of the market, but falling acetone prices have incentivised producers of acetone-based IPA to lower prices aggressively.

Image by Shutterstock

IPA is a solvent principally used in industrial and consumer products including cosmetics and personal-care products, de-icers, paints and resins, pharmaceuticals, food, inks and adhesives.

US IPA suppliers include ExxonMobil, Dow Chemical, LyondellBasell, Monument Chemical and Shell Chemical.

The photo above is a bottle of isopropanol. Image by Shutterstock