US spot refinery-grade propylene fell 1.5 cents/lb ($33/mt) Tuesday, trading at least once at 56.50 cents/lb ($1,246/mt) for September to reach a six-week low.
Spot RGP was assessed at 56.25-56.75 cents/lb delivered, matching levels last seen July 31, per Platts data. No other trades were heard by close of assessment.
Assessments have shed 3.5 cents/lb ($77/mt) since Friday’s of 60 cents/lb delivered. Spot RGP shed 2 cents/lb Monday, assessed at 57.75-58.25 cents/lb delivered, after sources said material for September delivery traded at least once at 58 cents/lb Mont Belvieu pipe.
After close of assessment Monday, RGP for September delivery transacted lower at 57.50 and 57 cents/lb MtB pipe, sources said.
“It’s all about increasing the RGP-PGP spread this week,” a veteran olefins trader said of the movements in the propylene market.
Spot PGP for September delivery rebounded 1.25 cents/lb on the day, heard done at 64.75 cents/lb MtB pipe a day after trading at 63.50 cents/lb MtB pipe ($1,399/mt) to open the week, which was down 2 cents/lb from Friday’s assessment of 65.25-65.75 cents/lb delivered.
PGP assessments last were below the 65-cent/lb mark July 26, when the grade was assessed at 63-63.50 cents/lb delivered. Platts assesses spot PGP on a weekly basis.
Spot PGP usually commands a 7- to 10-cent/lb premium over RGP, which can be purified into polymer-grade material.
The movements come less than a week after contract prices for September settled at a rollover, with PGP at 70 cents/lb delivered.
Expectations for spot and contract prices heading into October have been mixed in the market, with one camp expecting possible hikes on the back of an upcoming turnaround at PetroLogistics’ propane dehydrogenation unit in Houston.
The unit, which can produce polymer- and chemical-grade propylene, has a production capacity estimated at 650,000 mt/year after recent tweaks to the plant and is expected down for about three weeks beginning the last week of September.
Other sources are of the opinion that with downstream polypropylene expecting turnarounds of its own as early as October despite a tight market, PGP demand could be in for a drop, thus putting downward pressure on markets.
Domestic polypropylene demand has remained mostly steady through the summer, although exports beyond Mexico have been difficult to place given current pricing levels, sources said.
“We’ve seen PP demand remain strong for about six months now,” a source with a major polypropylene distributor said. “The market is do for a breather.”
Source: platts.com
