HOUSTON (ICIS)--US propylene spot prices were slightly lower than the prior week despite another drawdown for inventories as supply remains ample and stocks remain near record highs.
US polymer-grade propylene (PGP) spot prices were assessed on Friday at 30.000-33.750 cents/lb ($661-744/tonne), compared with 32.125 cents/lb in the previous week.
Inventories fell for the second consecutive week, but remain above 6m bbl and near double the level of the same week the prior year.
The build-up of inventories in the last several months is primarily due to an increase of propylene production from crackers. Length in the ethylene market and a late-2018 decline in crude oil values is encouraging increased usage of heavier feedstocks like propane and butane. Costs for the feedstocks tracked the decline in crude oil, and when cracked they produce less ethylene and more co-products like propylene.
Recent downstream outages and difficult export conditions also have contributed to the build-up of supply.
Propylene exports have been slowed by foggy weather in the Houston ship channel, limited export logistics, tight shipping availability and limited demand for US exports in other regions.
Export conditions are improving, with less frequent fog closures in the Houston ship channel in early March than during February.
Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.