The settlement puts polymer-grade propylene (PGP) at 55.50 cents/lb and chemical-grade propylene (CGP) at 54.00 cents/lb, according to ICIS pricing.
US producers had originally nominated reductions of 4 and 5 cents/lb for June, but consumers pushed for a larger decrease as a result of a softening in spot prices in the second half of May.
Spot PGP traded at 55.00 cents/lb in the last week of May, which was down by 10 cents/lb from levels seen in the second half of April.
Market sources cited weaker polypropylene(PP) demand and increasing monomer supply as factors putting pressure on the propylene market.
It is a combination of both, a market participant said, adding that most US olefins plants had resumed operations while supplies of ethylene and propylene had continued to increase.
According to sources, only one US cracker remained off line this week.
The 549,000 tonne/year unit in Morris, Illinois, was expected to resume operations at the end of June, a market source said.
US propylene supply from the refinery side was also on the rise.
Inventories stood at 3.233m bbl in the week ended 28 May, rising by 10% from 2.938m bbl a week earlier, according to figures from the US Energy Information Administration (EIA).
Propylene stockpiles last week were at their third-highest weekly level in 2010, trailing only two weeks in mid-January when inventories were at 3.493m and 3.434m bbl, according to EIA data
Refinery-sourced propylene accounts for around 60% of the US monomer market.
Chevron Philips Chemical, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical are among the major US producers of PGP and CGP.
DowChemical, INEOS, Ascend Performance Materials and Total are among the main buyers.
($1 = 0.82)
