The Urethane Blog

Propylene Settles


US January propylene contracts settle 9 cents/lb higher: sources

Houston (Platts)–25 Jan 2018 511 pm EST/2211 GMT


US January propylene contract prices were fully settled at a 9-cent increase, at 59 cents/lb for polymer-grade product and 57.5 cents/lb for chemical-grade product, sources said Thursday.

The settlement is in line with market expectations, which had been talked at up 8-10 cents/lb, sources said.

It is the seventh consecutive increase for US propylene contract prices, and 17.50 cents/lb higher than where contracts began 2017, according to S&P Global Platts data.


Support for higher contract pricing came from an increase in spot prices amid a combination of an ongoing outage at Dow Chemical’s propane dehydrogenation unit in Freeport, Texas, an unplanned outage at Formosa Plastics’ propylene splitter, and the delayed startup of Enterprise Products Partners’ 750,000 mt/year PDH unit in Mont Belvieu, Texas.

Dow’s PDH unit remains shut after an unplanned outage, followed by 30-45 days of maintenance, sources said. The 750,000 mt/year on-purpose propylene plant went down in mid-December, sources said.

Sources also cited the delayed startup of Enterprise’s newbuild 750,000 mt/year PDH unit in Mont Belvieu, Texas. The much-delayed PDH unit is expected to start up in early February, sources said.

Meanwhile, Formosa Plastics’ propylene splitter and steam cracker in Point Comfort, Texas, were shut December 21 because of a fire, a source with knowledge of operations said.

The unplanned shutdown at the propylene splitter — which purifies refinery-grade propylene into either polymer-grade or chemical-grade propylene — has also added to the supply tightness in PGP while contributing to length in RGP, sources said.


US spot polymer-grade propylene has averaged 13.4 cents/lb higher in January than in December, and was last assessed Thursday at 67.75-68.25 cents/lb FD USG for prompt-month (January) deliveries, unchanged day on day.

Refinery-grade product on a three- to 30-day basis has averaged 2.23 cents/lb higher in January compared with December, and was last assessed Thursday stable day on day at 39.5-40 cents/lb FD USG.

The PGP contract price is generally 2-3 cents above the spot PGP price at the end of the prior month and the beginning of the new month. Refinery-grade propylene pricing is also considered in the formula because it is a large source of PGP.

US propylene contract prices are settled on a monthly basis between major producers and buyers. The process includes price nominations by producers and subsequent negotiations with customers.

–Nida Qureshi,

–Edited by Derek Sands,