US propylene contract prices for October settled 0.5 cent/lb higher, with polymer-grade propylene closing at 30.5 cents/lb and chemical-grade propylene at 29 cents/lb, sources said Monday.
The uptick contrasts with the initial nomination of a rollover heard in late September.
The settlement is the first contract price increase since the February hike of 1 cent/lb. PGP contract prices moved from 49.5 cents/lb in January to 50.5 cents/lb in February, but declined to 30 cents/lb in September after seven consecutive drops.
The increase for October follows an 85% allocation of supplies from a major propylene producer, and also reflects higher heavy feedstock prices as well as stronger crude prices, sources said.
The contract price is generally 2 cents above spot PGP prices at the end of the prior month and the beginning of the new month. Refinery-grade propylene pricing is also considered in the formula because it is a large source of PGP.
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.
Also Monday, October and November RGP bids were seen at 17 cents/lb and 17.5 cents/lb Mont Belvieu-pipeline, respectively, while one October PGP deal was concluded at 28.5 cents/lb MtB-pipe. Platts assessed October and November PGP at 28.25-28.75 cents/lb FD USG, while RGP was assessed at 18-18.5 cents/lb delivered.
