The 20% increase, which stems from tight supply, puts polymer-grade propylene (PGP) at 87.50 cents/lb, topping the 85 cent/lb record settlement of July 2008.
The 15 cent/lb jump puts chemical-grade propylene (CGP) at 86 cents/lb.
According to sources, a number of contracts were agreed at those levels, but a full-market settlement was yet to be reached.
“It will happen, but not everybody [is] there yet,” a market source said.
A significant April increase in propylene was widely expected because of sharply higher refinery-grade propylene (RGP) spot prices in recent weeks.
Spot RGP is an indicator for trends on the contract side as the product accounts for around 60% of the US propylene market.
RGP for April was bid on Friday at 85 cents/lb, which is up from deals done at 71.50-72.00 cents/lb four weeks ago.
US producers had initially nominated increases of 15% for April propylene, but later withdrew the initiatives and pushed for a larger increase because of a continued uptrend in RGP.
Market sources said RGP prices were rising because of tight supply following a heavy refinery turnaround season in the first quarter.
The US had some 18 planned refinery shutdowns between January and March.
Maintenance also took place at another seven US refineries, which experienced outages lasting at least one week in the first three months of the year.
The refinery shutdowns have pushed US propylene stocks to their lowest level since December 2007, according to data from the Energy Information Administration (EIA).
The latest EIA figures put refinery-sourced propylene inventories at 1.523m bbl in the week ended 8 April, down by 38% from 2.468m bbl four weeks earlier.
US RGP prices were also receiving support from the recent restart of two cumene plants that went down for maintenance in the first quarter.
A third cumene unit was taken off line last week, but is expected to restart production by the end of April.
The surge in propylene prices could lead to demand destruction in the months ahead because buyers, particularly in the polypropylene (PP) sector, will struggle to pass through the April increase, a market participant said.
PP inventories have dropped compared with January, the source said, estimating that PP producers do not have too much extra material on hand and that some product substitution could happen downstream.
PP accounted for 56% of US propylene demand in 2010, according to industry figures.
Major US producers of PGP and CGP include Chevron Phillips Chemical, Enterprise Products, ExxonMobil, LyondellBasell, Petrologistics and Shell Chemical.
The main buyers include Dow Chemical, INEOS, Ascend Performance Materials and Total.
($1 = €0.69)
