US June propylene contracts fall on lower spot prices

HOUSTON (ICIS)–US June propylene contracts for the majority of market participants settled 4 cents/lb ($88/tonne) lower from May after a decline in spot prices and continued weak derivative demand.

The June contract settlement follows an 8 cent/lb decrease in the May contract.

This is the third straight contract price decline. Contract prices have fallen a total of 23 cents/lb in Q2, almost offsetting the 26 cents/lb rise in contract prices in Q1. Spot prices rose sharply in Q1 due to tight supply caused by propane dehydrogenation (PDH) maintenance outages, pushing up contract prices.

The June settlement puts contract prices for polymer-grade propylene (PGP) at 35.00 cents/lb, while chemical-grade propylene (CGP) contract prices are at 33.50 cents/lb.

The main outlet for propylene is as a feedstock for polypropylene (PP). Propylene is also used to produce acrylonitrile (ACN), propylene oxide (PO), a number of alcohols, cumene and acrylic acid.

Major US propylene producers include Chevron Phillips Chemical, ExxonMobil, INVISTA and Shell Chemical.

Major buyers include Arkema, Ascend Performance Materials, Braskem, Dow Chemical, INEOS, Oxea and Total.

Thumbnail shows items made out of polypropylene (PP), which is made from propylene. Image by ICIS.