US spot polymer-grade propylene traded at a 19-month high of 74.5 cents/lb Mont Belvieu-pipeline basis for September deliveries on Monday, a level not seen since February 2013, Platts data showed.
Platts last assessed US PGP at 70.5 cents/lb on September 19, up 1 cent/lb week on week.
Prior to the trade on Monday, spot PGP for September and October delivery were each heard concluded after Friday’s close at 74 cents/lb Mont Belvieu-pipeline.
US PGP was last heard trading as high as 74.5 cents/lb Mont Belvieu-pipeline and 75 cents/lb Mont Belvieu-pipeline on February 8, 2013, which was followed four days later by a February PGP contract settlement of 79 cents/lb, itself a 6 cent/lb month-on-month hike from January 2013.
Earlier this month, September PGP contracts settled at a rollover from August level at 72.5 cents/lb delivered.
Sources said that a strong refinery-grade propylene market, ongoing steam cracker outages and a propylene supply curtailment contributed to the spike in PGP prices.
Spot RGP was assessed Monday at 66.5 cents/lb delivered, the highest since February 28, 2013, when it was assessed at 67.5 cents/lb delivered, according to Platts data.
The rise in RGP prices stemmed from refinery output disruptions in the US Gulf Coast in recent weeks and strong gasoline pool demand, according to sources.
Additionally, stocks of propylene for non-fuel use marked their sixth consecutive weekly decline, dropping 253,000 barrels to 3.545 million barrels in the week ended on September 12, EIA data showed Wednesday.
Another contributing factor has been the ongoing turnarounds at four steam crackers, which has pushed the ethylene spot price to a record high of 76 cents/lb FD USG, according to Platts data.
Ethylene spot prices are at their highest level since Platts started assessing it in late July 2004.
The high ethylene prices are in turn making propylene production by metathesis not as profitable, according to sources.
Metathesis is a chemical reaction in which one molecule of 2-butene and one molecule of ethylene are combined to make two molecules of propylene.
In addition, Chevron Phillips Chemical’s declared a contingency on propylene sales effective July 10, following a fire-hit steam cracker outage on July 7 in Port Arthur, Texas.
Sources have said that the plant is expected to be restarted by November, however, official confirmation or an update on repairs from the company is yet to be provided.