Formosa Plastics' transaction price for all grades of US polypropylene will follow the change in polymer-grade propylene's US March contract price settlement effective Wednesday, the company said in a letter to customers obtained by S&P Global Platts.
A company spokesman could not be reached for comment.
Formosa Plastics is the second producer to announce such a change for March shipments. Total Petrochemicals & Refining USA unveiled a similar increase for all grades of US polypropylene earlier this week.
Expectations amongst propylene and polypropylene participants for March contract prices are divided, with some expecting a decrease of 1 cent/lb, some a flat settlement, and some an increase of as much as 5 cents/lb as a result of the recent climb in spot prices.
US spot polymer-grade propylene has increased 2.75 cents/lb ($61/mt) week on week and 57.5 cents/lb ($127/mt) since February 16, Platts data show.
Sources attributed the hike in pricing to the start of the US Gulf Coast refinery turnaround season this month, which could impact supply availability.
February US propylene contract prices settled at an increase of 6.5 cents/lb to 48 cents/lb for polymer-grade product and 46.5 cents/lb for chemical-grade product, sources said. The settlement was within market expectations, which had called for an increase of 5-7 cents, and put contract prices at their highest level since March 2015, when they were at 49 cents/lb for PGP and 47.5 cents/lb for CGP, according to Platts data.
In markets, spot export pricing was assessed Tuesday at $1,345-$1,367/mt (61-62 cents/lb) FAS Houston for homopolymer injection grades. Spot pricing is currently sitting at a 13-month high and was last higher on January 28, 2016, when it was assessed at $1,356-$1,378/mt (61.5-62.5 cents/lb) FAS Houston.
