US domestic polypropylene contracts for December were expected to rise 1 cent/lb ($22/mt) from November to around 66-67 cents/lb for homopolymer injection, in line with a similar uptick taking place in the monomer market, sources said Wednesday.
US polymer-grade propylene contracts for December began settling at a 1 cent/lb increase Tuesday afternoon. The settlement, which market participants expect to become marketwide, put the December PGP price at 58 cents/lb ($1,279/mt) delivered.
The increase in PGP prices was expected to translate to the polypropylene market, as the majority of domestic contracts are on a monomer-plus basis, with the premium ranging from 8-12 cents/lb, according to sources.
Platts assessed homopolymer injection contracts for November at 65-66 cents/lb on a delivered via railcar basis. At 66-67 cents/lb for December, homopolymer injection assessments would be at their highest levels since May, when they were at 76-77 cents/lb delivered via railcar basis.
The increase on PGP contracts, which sources said stemmed from stronger spot pricing on the back of recent production issues in the US Gulf Coast region, defied market expectations that called for a flat-to-down settlement as recently as last week.
Initial contract nominations were at a rollover for PGP by ExxonMobil Chemical and at plus-2 cents/lb for CGP by Shell Chemical, market sources said. Sources said PGP was re-nominated late last week or Monday at a 4-cent/lb increase, paving the way for contracts to settle at an increase. Polypropylene maker Ineos cited the 4-cent/lb nomination in a letter sent to customers on Monday that was obtained by Platts.
