US June propylene contracts settle at an increase amid production issues.

Petrotahlil -US June propylene contracts settled at a 0.5 cent/lb increase from May, as spot prices rose amid production issues.

The settlement puts June polymer-grade propylene (PGP) contracts at 26.5 cents/lb ($584/tonne) DEL (delivered) and chemical-grade propylene (CGP) at 25.0 cents/lb.

The settlement marks the first increase since September, when contract prices reached 39 cents/lb.

Spot prices rose throughout the month as production issues curbed supply.

Front-month PGP traded in June at 21.50-28.00 cents/lb, compared with 20.00-24.00 in May.

BASF Total Petrochemicals' cracker remains down at Port Arthur, Texas. Ethane only comprises around one-quarter of the cracker's feedslate. The remainder consists of heavier, propylene-yielding feeds, so the outage removes more propylene supply than at an average US cracker.

Enterprise Products' Mont Belvieu, Texas propane dehydrogenation (PDH) unit was first reported offline on 4 June. The PDH has a propylene capcity of 750,000 tonnes/year.

Demand for the largest propylene derivative, polypropylene (PP) is showing signs of gradual improvement, particularly in the packaging sector, but has not yet recovered to pre-crisis levels due to continued sluggishness from the appliance and automotive sectors.

The main outlet for propylene is as a feedstock for PP. Propylene is also used to produce acrylonitrile (ACN), propylene oxide (PO), a number of alcohols, cumene and acrylic acid.

Major US propylene producers include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, Flint Hills Resources and Shell Chemical.

Source :ICIS

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