US June propylene contracts settle lower, track lower spot prices

HOUSTON (ICIS)–US June propylene contracts settled lower for a majority of the market, sources confirmed on Monday, tracking declining spot prices since late May.

The settlement puts June polymer-grade propylene (PGP) contract prices at 36.5 cents/lb ($805/tonne) DEL (delivered) and chemical-grade propylene (CGP) contract prices at 35 cents/lb DEL, down by 3.5 cents/lb.

June’s lower settlement was anticipated amid falling spot prices, lower costs and supply outpacing demand.

Inventories remain high, and demand is sluggish across downstream sectors.

US propylene contracts are typically settled in the middle of the month for the current month.

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, ExxonMobil, Flint Hills Resources and Shell Chemical.

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

Image above shows products made out of polypropylene, a derivative of propylene. Photo by Al Greenwood