US July propylene contracts fully settle at rollover

HOUSTON (ICIS)–US July propylene contracts have fully settled at a rollover, sources confirmed on Friday.

The settlement puts July polymer-grade propylene (PGP) at 67.5 cents/lb ($1,488/tonne) and July chemical-grade propylene (CGP) at 66.0 cents/lb.

July contracts were nominated by one producer to roll over, while another producer nominated a 1 cent/lb increase.

The settlement snaps a five-month stretch where contracts fell each month, a total drop of 7 cents/lb.

Market sources said that the propylene spot market reached a floor in early July and has started to rebound, although PGP trading was thin.

With US propylene contracts typically settling 2.0-3.0 cents/lb above recent spot activity, July contracts could have risen as much as 0.5 cents/lb.

Sources said that as this represents a likely floor, demand and orders for PGP for polymers production should increase in July and August as buyers look to build cost-effective inventories.

Propylene supply is healthy, sources said, although it is near its expected peak as gasoline production is nearing its peak.

Major US propylene producers include Chevron Phillips Chemical (CP Chem), Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical.

Major buyers include Ascend Performance Materials, Dow Chemical, INEOS and Total.