Spot propylene prices continued their strong upward movement in USA last week, leading producers to nominate hefty price increases on April contracts, as per Chemorbis. These increases have put US propylene at a premium when compared with prevailing propylene prices in other major global regions, but has so far failed to trigger propylene imports by American buyers. Over the past few weeks, Asian propylene sellers have been examining the possibility of exporting to the US, as demand in Asia is relatively poor and supply levels are rising as several integrated PP producers have slashed run rates at their facilities to take advantage of the healthier margins available in the spot propylene market. However, Asian sellers have not as yet had much luck securing deals to the US despite the favorable price gap between spot propylene prices in the two regions. Reluctance on part of the American buyers to make purchases from outside the country can be attributed to the longer time taken for ex-Asia shipments to arrive and also the fact that since USA is a traditional exporter of propylene, it does not have many ports capable of handling propylene imports. Current spot propylene prices in Europe and Asia stand at much lower levels of US$1359-1373/ton FD NWE and at US$1250/ton FOB Korea.
Recent surges in spot propylene prices in USA, likely to be reflected in a steep increase in the April contract, have caused the buyers to consider imports. Last week, a done deal for polymer grade propylene was reported in the US at US$1741/ton FD USG, an increase of US$32/ton from the previous week. Prices are threatening to set a new record high. With spot prices having gained around US$264/ton when compared with the beginning of the month, US propylene sellers have nominated large increases on their April contract prices. Several producers in the country have nominated price increases of US$242-264/ton, which has prompted PP producers to ask for similar price increases on their monthly contract prices.