Houston — Some US November propylene contracts were settling 10 cents below the October contract prices, according to market participants early Wednesday.
The settlements, if accepted market wide, would take polymer-grade propylene contracts down to 50 cents/lb and chemical-grade contracts down to 48.50 cents/lb.
One propylene buyer said the market was not yet fully settled by a majority of the market, but expects a market-wide settlement by Thursday.
The reported declines for November were in line with market expectations heading into the month, which were attributed to increased production, growing inventory and a decline in propylene spot prices. US PGP spot prices early Wednesday were assessed at 46 cents/lb, down 10 cents month on month, which have lead to expectations of a 7-10 cent decline for the November propylene contract price. Prompt November PGP spot prices early Wednesday were at 46 cents/lb FD USG, down 10 cents month on month.
Meanwhile, the latest inventory data released by the Energy Information Administration (EIA) on November 7 had showed domestic propylene inventory had increased four consecutive weeks to 3.728 million barrels.
The increase in inventory was attributed to continued production at all three US propane dehydration units during the month.