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Houston — US September propylene contract prices showing a 1-cent decrease compared with August were accepted by a marketwide majority, sources said Friday. The decline is in line with most initial settlements from a week earlier.
The 1-cent decline took the September polymer-grade propylene contract price down to 60 cents/lb ($1,323/mt) and the September chemical-grade propylene contract price to 58.50 cents/lb. Although market sentiment was that September contracts would be lower, one producer remained flat at the August contract price.
The decline was in line with market expectations calling for a rollover to a decline of 1 cent/lb.
The August polymer-grade propylene contract price was 61 cents/lb and the August chemical-grade propylene contract price was 59.50 cents/lb ($1,312/mt).
Looking ahead to October, however, trade sources say another decline for October would be difficult to push through due to high spot propylene prices, tight supply availability and two propane dehydrogenation units seeing lower output in September.
In August, trade participants expected a lower contract price in September and possibly October due to growing inventory and the expectation that all three US PDH units would be operating.
But sources say spot PGP prices are still high. The spot price has averaged 57.36 cents/lb through the first 27 days of September, according to S&P Global Platts data. The August PGP average was 58.49 cents/lb.
Strength in the feedstock propane market has kept spot propylene prices from falling further in September. Spot US propane has averaged 105.76 cents/gal so far in September, according to Platts data, compared with 97.875 cents/gal in August.