US April propylene contract prices were beginning to settle Friday at a 1 cents/lb decrease — to 46 cents/lb for polymer-grade product and 44.5 cents/lb for chemical-grade product, sources said.
One buyer, one producer and two other market sources confirmed settlement at that level.
The settlement, if accepted marketwide, would be in line with market expectations, which had been talked at a decrease of 1 cents/lb to a rise of 2 cents/lb.
The decline in prices is due to thin demand, sources said.
LyondellBasell declared force majeure on April 6 on polypropylene from its Lake Charles, Louisiana, plant due to a broken extruder, the company said in a letter to customers obtained by S&P Global Platts.
The Lake Charles facility houses two PP lines with a combined capacity of 667,000 my/year.
Meanwhile, polypropylene demand has been heard thin amid expectations that feedstock propylene, and subsequently polypropylene pricing, will fall.
US spot polymer-grade propylene was assessed Friday at 44.75-45.25 cents/lb FD USG for prompt-month (April) deliveries, up 0.25 cent day on day. The forward month (May) was also 0.25 cent higher, assessed at 44.5-45 cents/lb FD USG.
Refinery-grade product on a three- to 30-day basis was assessed 0.50 cent higher at 35-35.5 cents/lb FD USG.
The PGP contract price is generally 2-3 cents above the spot PGP price at the end of the prior month and the beginning of the new month. Refinery-grade propylene pricing is also considered in the formula because it is a large source of PGP.
US propylene contract prices are settled on a monthly basis between major producers and buyers. The process includes price nominations by producers and subsequent negotiations with customers.
