HOUSTON (ICIS)--US March propylene contracts settled lower by 4 cents/lb for the majority of the market amid falling feedstock prices, ample supply and muted demand.
The settlement puts March polymer-grade propylene (PGP) contracts at 28.0 cents/lb ($617/tonne) DEL (delivered) and chemical-grade propylene (CGP) at 26.5 cents/lb DEL.
Contract prices are at their lowest levels in 11 years.
Spot prices fell by around 30% during March due to muted demand from the coronavirus (Covid-19) and because of collapsing crude.
Demand for polypropylene (PP), the biggest derivative of proplyene, has been lacklustre for months due to a slowing global economy, and is only expected to weaken further.
Feedstocks propane and butane hit 21-year lows during March, also pressuring prices.
Inventories were mostly steady throughout the month but remain high in a historical context.
The main outlet for propylene is as a feedstock for polypropylene (PP). Propylene is also used to produce acrylonitrile (ACN), propylene oxide (PO), a number of alcohols, cumene and acrylic acid.
Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.
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