HOUSTON (ICIS)--US April propylene contract prices have settled down 6 cents/lb amid improving supply and falling demand, market sources confirmed on Wednesday.
Propylene contracts settled on Tuesday and Wednesday, putting April polymer-grade propylene (PGP) at 46 cents/lb ($1,014/tonne) and chemical-grade propylene (CGP) at 44.5 cents/lb.
The settlement halts three consecutive months of contract price increases, which culminated with March contracts settling at over-two-year highs.
Prices had been climbing in the first quarter largely due to limited availability as cracker turnarounds and production issues tightened supply.
Production improved during April as two US Gulf crackers undergoing maintenance in the first quarter restarted in March and two other US Gulf crackers, which had production issues during March, had restarted by mid-April.
Downstream turnarounds in April had limited demand, further allowing supply recover. Two derivative plants began turnarounds in early April, and other derivative plants have turnarounds planned for May and June.
However, supply improvement during April has been limited due to a turnaround for a US Gulf propane dehydrogenation (PDH) plant, which is expected to last through May.
Data from the US Energy Information Administration had shown propylene inventories significantly lower year on year, although there was some build-up in late March and stocks moved higher in mid-April.
US propylene contracts are typically settled in the middle of the month for the current month.
Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.
Major buyers include Arkema, Ascend Performance Materials, Braskem, Dow Chemical, INEOS, Oxea and Total.
Image: Propylene is used to make polypropylene, a plastic often used to make bottles. Source: Monkey Business Images/REX/Shutterstock