Initial settlement levels for US September propylene contract prices called for a 6 cents/lb increase to 43 cents/lb for polymer-grade product and 41.5 cents/lb for chemical-grade product, market sources said Wednesday.
The settlement, if accepted on a market-wide basis, is below the latest nomination of a 7-cent increase and would be the fourth increase in as many months.
Additionally, the settlement would put contract prices at their highest level since April 2015's PGP and CGP contract prices of 43 cents/lb and 41.5 cents/lb, respectively, according to S&P Global Platts data.
The settlement level is within market expectations, which recently called for a 5-7 cents/lb hike.
US spot polymer-grade propylene for prompt-month and forward-month were assessed Wednesday at 41.125-41.625 cents/lb FD USG and 40.25-40.75 cents/lb FD USG, respectively.
Refinery-grade product on a three- to 30-day basis was assessed flat at 30.75-31.25 cents/lb FD USG delivered.
The PGP contract price is generally 2-3 cents above spot PGP prices at the end of the prior month and the beginning of the new month. Refinery-grade propylene pricing is also considered in the formula because it is a large source of PGP.
US propylene contract prices are settled on a monthly basis between major producers and buyers. The process includes price nominations by producers and subsequent negotiations with customers.
