US propylene contract prices for November are settling 5 cents lower, with polymer-grade propylene closing at 71.50 cents/lb and chemical-grade propylene at 70 cents/lb, sources said Monday.
Market expectations in the past week called for a 4-6 cent drop in US contract prices for PGP and CGP. Discussions of a settlement picked up Friday, with sources citing three producers indicating the 5 cent/lb decline and one producer holding out for a decrease of 4.5 cents/lb.
Initial nominations for November contracts in late October saw a call for a 2-cent decrease for PGP and CGP contract prices, sources said, adding that ExxonMobil Chemical made the initial nominations.
Within a week, Shell Chemicals nominated CGP prices at a 2.5-cent decrease, sources added.
If the settlement is accepted marketwide, it would put contract prices at their lowest level since July’s 67.5 cents/lb and 66 cents/lb for PGP and CGP, respectively.
Sources said upcoming production increases combined with declining refinery-grade propylene, ethylene and overall oil prices have led to the decrease seen in PGP values.
RGP prices have been under pressure thanks to higher refinery operating rates and lower global oil prices, sources said, and RGP is one of the major feedstocks for PGP production.
In spot markets Monday, November and December PGP were heard offered at 69 cents/lb MtB-pipe. Platts last assessed PGP and CGP on Friday at 67.75-68.25 cents/lb delivered and 64.75-67.25 cents/lb delivered, respectively, each nearing four-month lows.
– Platts.com
