HOUSTON ,June 29-A US propylene producer nominated a rollover for July, market sources said on Tuesday, confirming expectations that suppliers would seek to capitalise on a recent jump in spot prices to reverse a downtrend on the contract side.
US polymer-grade propylene (PGP) in June settled at 55.50 cents/lb ($1,224/tonne, ?91/tonne), down by 8 cents/lb, while chemical-grade propylene (CGP) contracts were agreed at 54.00 cents/lb, also an 8 cent/lb decrease.
Propylene contracts were widely expected to drop in July, but sentiment changed last week when spot prices rose by about 10% in response to news of a cracker outage in Texas and an upswing in energy prices.
Spot refinery-grade propylene (RGP) for June traded last week at 43.00 cents/lb, up from 38.50-40.00 cents/lb a week earlier.
RGP is a key indicator for contract prices because refinery-sourced propylene accounts for around 60% of the US monomer market.
The jump in RGP prices followed news that a Chevron Phillips Chemical cracker in Port Arthur, Texas, had been shut down during the weekend of 19-20 June.
The 803,000 tonne/year unit remains off line. The outage was caused by a disruption in steam supply to the site late on 18 June.
An uptrend in crude oil prices in the second half of June was also supporting propylene, sources said.
Crude oil dropped to $75.94/bbl on Tuesday from $78.25/bbl the previous day, but the front month had gained 4.6% for the month since settling at $72.58/bbl on 1 June.
US propylene contracts usually settle at the beginning of the month being negotiated.
At least two more producers could step out with July nominations in the coming days.
Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical are among the major US producers of PGP and CGP.
Dow Chemical, INEOS, Ascend Performance Materials and Total are among the main buyers.
($1 = ?.81)
US polymer-grade propylene (PGP) in June settled at 55.50 cents/lb ($1,224/tonne, ?91/tonne), down by 8 cents/lb, while chemical-grade propylene (CGP) contracts were agreed at 54.00 cents/lb, also an 8 cent/lb decrease.
Propylene contracts were widely expected to drop in July, but sentiment changed last week when spot prices rose by about 10% in response to news of a cracker outage in Texas and an upswing in energy prices.
Spot refinery-grade propylene (RGP) for June traded last week at 43.00 cents/lb, up from 38.50-40.00 cents/lb a week earlier.
RGP is a key indicator for contract prices because refinery-sourced propylene accounts for around 60% of the US monomer market.
The jump in RGP prices followed news that a Chevron Phillips Chemical cracker in Port Arthur, Texas, had been shut down during the weekend of 19-20 June.
The 803,000 tonne/year unit remains off line. The outage was caused by a disruption in steam supply to the site late on 18 June.
An uptrend in crude oil prices in the second half of June was also supporting propylene, sources said.
Crude oil dropped to $75.94/bbl on Tuesday from $78.25/bbl the previous day, but the front month had gained 4.6% for the month since settling at $72.58/bbl on 1 June.
US propylene contracts usually settle at the beginning of the month being negotiated.
At least two more producers could step out with July nominations in the coming days.
Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell and Shell Chemical are among the major US producers of PGP and CGP.
Dow Chemical, INEOS, Ascend Performance Materials and Total are among the main buyers.
($1 = ?.81)
