US propylene contract prices settle 1.5 cent higher for March, with polymer-grade propylene closing at 31.5 cents/lb and chemical-grade propylene at 30 cents/lb, sources said Friday.
The uptick was within market expectations and below the initial nomination of a rollover, heard in late February.
The settlement marks the first rise for the year.
PGP contract prices rose to 50.5 cents/lb in February from 49.5 cents/lb in January, but slid as low as 30 cents/lb in September after decreasing for seven consecutive months.
The increase in March follows climb in crude oil pricing, higher propane feedstocks and drop in propylene inventories, which in turn ran pricing higher, source said.
US propylene contract prices settle on a monthly basis between major producers and buyers. The process includes price nominations by producers and subsequent negotiations with customers.
The contract price is generally 2-3 cents above spot PGP prices at the end of the prior month and the beginning of the new month. Refinery-grade propylene pricing also is considered in the formula (and is within 8-12 cents/lb below PGP contract price level) because it is a large source of PGP.
In markets, March PGP was seen bid at 29.5 cent/lb MtB-pipe, while refinery-grade product was in the bid-offer range of 20-22 cents/lb MtB-pipe.
Platts assessed US PGP and RGP on Thursday at 29.75-30.25 cents/lb FD USG and 20.75-21.25 cents/lb FD USG, respectively.
