The US chemical-grade propylene contract price for August has been nominated at a rollover from July at 50.50 cents/lb, market sources said Monday.
The nomination followed an initial price nomination for the August US polymer-grade propylene contract heard Friday that also called for a rollover, with that price at 52 cents/lb.
Market sources indicated ExxonMobil Chemical made the nomination on the PGP front, while Shell Chemical nominated for CGP. Confirmation from either company was not available by time of publication. No other nominations were heard.
Propylene contracts have been unchanged since June, when prices fell 15.5 cents/lb on poor demand and ample supply, sources said.
The market has seen strong demand from polypropylene over the past two months, but not from other downstream markets, leading to general weakness in pricing and continued length in supply, particularly refinery-grade propylene, which can be used to make CGP and PGP, sources said.
"Right now demand indicates the market does not need the refinery material," a source with a major producer said.
Spot PGP was last assessed Friday by Platts at 48.75-49.25 cents/lb delivered USG basis, while spot CGP was at 45.75-46.25 cents/lb delivered USG basis.
Spot RGP was assessed Friday at 36.50-37 cents/lb delivered USG basis.
Spot PGP for August was heard offered at 49 cents/lb Mont Belvieu-pipe basis against no bids in Monday morning trading
Some market sources, including at least one major buyer, argue that the current spot values should warrant a decrease in the contract price of 1-2 cents/lb.
US propylene contracts are settled on a monthly basis between major producers and buyers. The process includes price nominations by producers and subsequent negotiations with customers.
