US June Propylene Contracts Settle at an Increase Amid Production Issues
2020-06-30    [Source:ICIS]

PUdaily, Shanghai —— HOUSTON--US June propylene contracts settled at a 0.5 cent/lb increase from May, as spot prices rose amid production issues.

    The settlement puts June polymer-grade propylene (PGP) contracts at 26.5 cents/lb ($584/tonne) DEL (delivered) and chemical-grade propylene (CGP) at 25.0 cents/lb.

    The settlement marks the first increase since September, when contract prices reached 39 cents/lb.


    Spot prices rose throughout the month as production issues curbed supply.

    Front-month PGP traded in June at 21.50-28.00 cents/lb, compared with 20.00-24.00 in May.

    BASF Total Petrochemicals' cracker remains down at Port Arthur, Texas. Ethane only comprises around one-quarter of the cracker's feedslate. The remainder consists of heavier, propylene-yielding feeds, so the outage removes more propylene supply than at an average US cracker.

    Enterprise Products' Mont Belvieu, Texas propane dehydrogenation (PDH) unit was first reported offline on 4 June. The PDH has a propylene capcity of 750,000 tonnes/year.

    Demand for the largest propylene derivative, polypropylene (PP) is showing signs of gradual improvement, particularly in the packaging sector, but has not yet recovered to pre-crisis levels due to continued sluggishness from the appliance and automotive sectors.

    The main outlet for propylene is as a feedstock for 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, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.

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