Home > Industry News > US February propylene contracts settle down 1.5 cents/lb amid long supply
US February propylene contracts settle down 1.5 cents/lb amid long supply
HOUSTON (ICIS)--US February propylene contract prices settled down by 1.5 cents/lb from the prior month for a majority of the market amid lengthy supply.
The February settlement puts contract prices for polymer-grade propylene (PGP) at 38.5 cents/lb ($849/tonne) and for chemical-grade propylene (CGP) at 37.0 cents/lb.
The February settlement is the fourth consecutive decline for propylene contract prices, which have been under pressure from building inventory levels amid good production and difficult export conditions.
While refinery operating rates have fallen amid the start of spring turnaround season, propylene production from crackers and other sources remains good.
Propylene production from crackers has been strong as a late-2018 drop in crude oil values had improved economics for heavier cracker feedstocks.
Meanwhile, US propylene exports cargoes have been slowed by foggy weather in the Houston Ship Channel and tight shipping logistics.
Demand for US propylene exports has been slowed by lengthy supply in Europe and the recent Lunar New Year holidays in Asia.
Some propylene derivatives are facing similar logistical issues, which is slowing domestic propylene demand.
US propylene inventories rose to record levels in mid-February, extending records set earlier in February and in January.
US propylene contracts are typically settled in the middle of the month for the current month.
Major US propylene producers include Chevron Phillips Chemical, ExxonMobil, Flint Hills Resources and Shell Chemical.
Major buyers include Arkema, Ascend Performance Materials, Braskem, Dow Chemical, INEOS, Oxea and Total.