HOUSTON (ICIS)–US March propylene contracts started to settle down 1.5 cents/lb ($33/tonne) to close the week, but sources on Friday said that a full settlement had not been reached.
If the initial settlement is accepted in full, it would put March polymer-grade propylene (PGP) prices at 49.0 cents/lb and March chemical-grade propylene (CGP) at 47.5 cents/lb.
Sources expected the settlement to find full acceptance, as spot prices have come down since the February settlement on weaker demand and slightly improving supply.
At least four US polypropylene (PP) producers are under force majeure (FM) declarations, which have severely limited domestic PGP consumption.
Additionally, lower overseas propylene prices have prevented US PP producers from being able to compete in the global spot market, further curtailing their demand for PGP.
Spot PGP prices rose in February on expectations of a rebound in crude oil and tighter supply, but March markets defied those expectations.
US propylene supply remains adequate, buyers said, as crackers continue to run strong and are still cracking a somewhat steady amount of heavier feeds.
US propylene contracts typically settle in the first half of the month for the rest of the month.
Major US propylene producers include Chevron Phillips, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical.
Major buyers include Ascend Performance Materials, Braskem, Dow Chemical, INEOS and Total.