HOUSTON (ICIS)--US December propylene contracts have settled at an increase of 1 cent/lb from the previous month, market sources said on Thursday.
The settlement puts December contract prices for polymer-grade propylene (PGP) at 50.0 cents/lb ($1,102/tonne), up from 49.0 cents/lb in November, and for chemical-grade propylene (CGP) at 48.5 cents/lb, up from 47.5 cents/lb in November.
The settlement is the third consecutive increase for propylene contract prices and the first unanimous settlement since disruptions caused by Hurricane Harvey.
The late-August hurricane had caused multiple production outages along the Texas coast. Many outages were resolved within weeks of the hurricane. However, several olefin units remained offline into November and one into December, and refinery operating rates remained below pre-Harvey levels until late November.
Effects of the hurricane also delayed the start-up of Enterprise Products' 750,000 tonne/year propane dehydrogenation (PDH) unit, which had been expected to start up in September. The unit began start-up activities in late November, which could last through the end of December.
Despite the normalising of production and the imminent start-up of the new PDH unit, inventory levels have remained low, keeping upward pressure on propylene values. For the week ended 15 December, propylene inventories of 2.585m bbl were down from the prior year by 44%, according to data from the US Energy Information Administration (EIA).
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.