US spot propylene drops to three-year low

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US spot polymer-grade propylene prices fell 1.25 cents Thursday to hit their lowest level in more than three years, with sources attributing the drop to downstream and weakening demand.

Spot was assessed Thursday at 29.25 cents/lb FD USG and was last lower on March 4, 2016, when it was assessed at 28.75 cents/lb FD USG, according to S&P Global Platts data.

Sources said the weaker downstream polypropylene demand has contributed to an oversupply of propylene and consequently weaker pricing.

“Operating rates at crackers and are decent so is up, [arbitrage] has been shut for some time,” said one source, adding this “all leads to more propylene.”

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Sources also talked about unconfirmed production issues for downstream propylene oxide following ’s on November 27 in Port Neches.

Spot PGP has fallen nearly 9% since November 27, according to Platts data.

Market expectations for December propylene contract settlements call for a drop of 3.5-4.5 cents/lb.

— Astrid Torres, astrid.torres@spglobal.com

— Edited by Richard Rubin, newsdesk@spglobal.com

Source: Platts

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