An initial price nomination for the September US polymer-grade propylene contract calls for a 4-cent/lb ($88/mt) increase from August, market sources said Tuesday. PGP contracts last settled for August at 50.50 cents/lb ($1,113/mt), which was 1.5 cents/lb lower than July and June.
The nomination, which sources said came from major producer ExxonMobil Chemical, came in anticipation of Hurricane Isaac, which was upgraded from a tropical storm Tuesday and is expected to make landfall late Tuesday in Louisiana.
"[It's] a hurricane contingency increase," an olefins trader said of the nomination.
No other nominations were heard by time of publication, and confirmation from ExxonMobil was unavailable as the company's policy is not to comment on pricing or day-to-day operations.
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.
Spot PGP has hovered below the 50-cent/lb mark for much of August, last assessed Friday at 48.25-48.75 cents/lb FD USG and last heard bid Monday at 49 cents/lb MtB pipe basis for August and September.
