August US propylene CP settles down 1.50 cents/lb on month: sources

US chemical companies have agreed to an August contract price for polymer-grade propylene of 45 cents/lb, down 1.50 cents on the month, market sources confirmed Aug. 28.

Additionally, the contract price for chemical-grade propylene also dropped 1.50 cents/lb to 43.50 cents/lb for August.

The settlement process was not unanimous, according to sources directly involved.

Contract price discussions take into account spot price movements throughout the month. Spot PGP had mixed movements during August, with an overall drop of 4.25 cents/lb, according to spot prices published by Platts, part of S&P Global Energy.

There was an increase seen in spot prices on Aug. 12, as higher trades were heard in the market in response to a flaring event reported at Invista's PDH unit.

Sources agreed that this was a short-lived response from the market, since there was no real impact on production. The event came as Dow's PDH unit was still under planned maintenance and shortly after emissions events were reported at Enterprise's PDH 1 and PDH 2.

An olefins trader said the PGP market is currently driven by unplanned outages, adding that the impact from the issues at PDH units has subsided.

"Demand is pretty lukewarm. There is no story in derivatives; the only real story is from PP that is riding a wave from the geopolitical climate," said a propylene buyer.

A second propylene buyer echoed the sentiment, adding that weak demand is expected to continue in the following months.

Platts is part of S&P Global Energy.