April US propylene contract prices reached final settlements Wednesday, posting a 6-cent/lb drop to 46 cents/lb for polymer-grade product and to 44.5 cents/lb for chemical-grade product, sources said Wednesday.
The settlement is within market expectations, which recently called for a decrease of 5-8 cents, sources said.
Multiple propylene market participants -- including three buyers, three producers, one trader and four downstream polypropylene participants -- confirmed the settlements at that level.
Sources cited the decrease to an increase in supply, noting a combination of recent refinery and steam cracker restarts, an increase in propane/butane cracking in steam crackers, and high run rates for metathesis units.
The supply increase has been met with falling demand. Sources have said that propylene buyers are holding off orders and reducing their derivative run rates, expecting lower prices in the coming weeks.
Spot PGP hit a three-month low on April 19, assessed at 36.5 cents/lb FD USG, after shedding 12.5 cents/lb from the beginning of the month, according to S&P Global Platts data.
Since April 19, spot PGP has climbed 2 cents/lb, last assessed Tuesday at 38.5 cents/lb FD USG, according to Platts data.
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.
