US March PGP contract settles at 1-year high

The March contract for US polymer-grade propylene (PGP) settled higher by 3¢/lb at 58¢/lb, its highest settlement since March 2023.

The year-high settlement came in the wake of two planned turnarounds at on-purpose propylene producing units that kept supply tight. Dow's 750,000 metric tonne (t)/yr propane dehydrogenation (PDH) unit in Freeport, Texas, returned to operations two weeks ago after being down since 2 February. Enterprise's 750,000 t/yr PDH-1 unit in Mont Belvieu, Texas, began its 70-day turnaround on 10 March. With the near-term supply tightness, US spot PGP for March delivery traded as high as 60¢/lb at the start of the month, the highest spot trade since March 2023. It since declined to trade at 52¢/lb on 22 March.

The US PGP contract has not decreased since August 2023, when it declined by 0.5¢/lb to settle at 34.5¢/lb. The last time the monthly contract settled higher than 58¢/lb was May 2022 when it settled at 61¢/lb, when global oil prices were elevated in the wake of the start of the Russia-Ukraine conflict.

By Michael Camarda