US spot refinery-grade propylene declined 0.75 cents/lb Thursday to reach a five-month low as propylene markets weaken, according to sources.
Spot RGP was assessed at 58-58.5 cents/lb delivered, after May and June buying bids were heard at 57.5 cents/lb Mont Belvieu-pipeline basis, against May offers heard at 59 cents/lb MtB-pipe. The assessment is at its lowest level since the December 5 assessment of 56.5-57 cents/lb delivered, per Platts data. Spot RGP was last heard traded Tuesday at 57 cents/lb MtB-pipe for May deliver.
"Propylene is pretty weak. Polypropylene and other derivatives like cumene and ACN are not doing well either," an olefins trader said of the movements in the propylene market. "The half-cent contract decrease for May was definitely a surprise and markets are now expecting 1-2 cent/lb decrease in June," the trading source added.
Spot polymer-grade propylene for May delivery traded at 67 cents/lb MtB-pipe basis, itself at the lowest level since late November.
Spot PGP usually commands a 7- to 10-cent/lb premium over RGP, which can be purified into polymer-grade material.
The decline started less than a week after contract prices for May settled at a decrease, with PGP at 70.5 cents/lb delivered. The dropped marked the fourth decrease in as many months, despite talk of expected tightness on the back of an short turnaround at PetroLogistics' propane dehydrogenation unit in Houston.
The 650,000 mt/year PDH unit, that can produce polymer- and chemical-grade propylene, went down for 4 days planned maintenance on May 4.
