US spot refinery-grade propylene was assessed at 16.5-17 cents/lb FD USG Monday following talks of declining crude oil prices, strong run rates and weak polymer-grade propylene.
Spot RGP was last assessed lower on January 2, 2009, at 13.125 cents/lb, Platts data showed.
Monday’s assessment was based on August bid-offer ranges of 15-18.5 cents/lb Mont Belvieu-pipeline. It was traded at 16.5 cents/lb MtB-pipe after the close of assessment.
Monday’s PGP assessment of 25.75-26.25 cents/lb delivered was the lowest since April 9, 2009, when the spot price was assessed at 26 cents/lb.
US propylene production facilities — refineries, steam crackers, splitters and propane dehydrogenation units — have seen steady operation in the past few months.
RGP is feeling the squeeze from lower crude prices, NYMEX October crude settled down $2.21 at $38.24/b, off its intraday low of $37.75/b. ICE October Brent settled $2.77 lower at $42.69/b after having fallen as low as $42.51/b.
US refineries were running at 95.1% of capacity in the week that ended August 14, according to the US Energy Information Administration, while stocks of propylene for non-fuel use totaled 4.528 million barrels.
On the petrochemicals side, RGP can be then purified into polymer-grade propylene, which is mostly used for polypropylene production.
PGP prices have recently softened as heavier feedstocks, yielding higher volumes of PGP, have decreased with crude prices, which in turn is applying pressure on RGP prices.
Lastly, Dow Chemical is to start a new propane dehydrogenation plant in October at its Freeport, Texas, petrochemical complex, which will lead to even higher PGP production and more pressure on both PGP and RGP prices.
