The expected drop in chemical-grade and polymer-grade propylene could be less than originally anticipated as refinery-grade propylene prices have rebounded this week.
"The refinery-grade sentiment is turning around," a trading source said Wednesday. "Some people were talking about a 4-cent drop in the contract. But with refinery-grade hitting bottom, and coming back up, the most we can expect to see is a 2- to 3-cent drop. That would be the maximum."
The polymer-grade contract for June was settled at 55.5 cents/lb ($1,223.55/mt) delivered. The chemical-grade price was settled at 54 cents/lb delivered. The last polymer-grade trade was heard done at 51 cents/lb, while the last chemical-grade deal was done at 49.5 cents/lb.
Refinery-grade propylene for June traded at 43 cents/lb on Tuesday, up more than 2 cents from Monday. A 41 cents/lb trade was also heard done, but the timing of the deal could not be confirmed.
Olefins prices have been stronger across the board this week following the unexpected shutdown of Chevron Phillips' Port Arthur, Texas plant. The plant shut during the weekend weekend following a loss of steam supply to the plant, according to a filing with the Texas Commission on Environmental Quality. According to the filing, there was an "emergency shutdown of all process units due to disruption of steam supply to the plant."
Calls to Chevron Phillips seeking comment were not returned. The Port Arthur facility produces ethylene, propylene and cyclohexane. According to the filing affected units include cyclohexane and ethylene units, as well as cumene feed preparation units. The plant produces approximately 1.75 billion lbs/year of ethylene and propylene.