Higher polymer-grade propylene and chemical-grade propylene prices are pushing up propylene derivatives prices, market sources said Wednesday.
Recently announced price increases for propylene derivatives include for isopropyl alcohol, normal butanol, 2-ethylhexanol, butyl acetate, acetone and polypropylene, sources said.
“With the propylene price push, prices have to go up,” a downstream producer said.
August contracts for polymer-grade propylene were heard settling up 5 cents/lb ($110/mt) to 70 cents/lb ($1,543/mt). August contracts for chemical-grade propylene were also heard settling up 5 cents to 68.50 cents/lb ($1,510/mt), multiple sources said.
The higher polymer-grade propylene and chemical-grade propylene contract settlements and higher spot prices have been attributed to a force majeure declaration by Chevron Phillips Chemical on propylene supplies as well as a four-week planned turnaround at PetroLogistics’ propane dehydrogenation facility in Houston, scheduled to start September 28. The force majeure declaration allows a 70% allocation and is in effect until further notice sources said.
Polypropylene producers Formosa Plastics, ExxonMobil, LyondellBasell, Total and Ineos have announced increases of 2 cents for all grades of polypropylene to be effective between August 16 and September 1, sources said. Braskem America announced an increase of 3 cents/lb for homopolymer and 2 cents/lb for co-polymer, to be effective September 1.
US polypropylene contracts track PGP movements closely as a majority are settled on a monomer-plus basis, with the premium over PGP between 8-12 cents, sources said.
Acetone producers Ineos Phenol and Sasol announced 5-cent price increase effective August 15, and Honeywell announced a 5-cent price increase effective August 9, according to separate letters sent to customers.
Isopropyl alcohol producers ExxonMobil and LyondellBasell announced 5-cent increases according to notices sent to customers. It is likely that other producers will announce similar increases and the increases will be accepted, at least in part, sources said.
US acrylonitrile prices are also expected to rise in August and into September on higher propylene. Sources in the ACN market said this week that there was definitely cost-pressure due to feedstock chemical-grade propylene.
Other propylene derivatives such as normal butanol, 2-ethylhexanol and butyl acetate have had recent announcements of 3-4 cents/lb price increases. Other derivative markets such as methyl isobutyl ketone could still see increases announced for September 1, sources said.
Source: platts.com
