US polymer-grade propylene contracts for April were beginning to settle at an all-time high, up more than 20 percent at 87.50 cents/lb, market sources reported Friday.
The new CP represented a 15-cent/lb increase over March values, which were at 72.50 cents/lb for polymer-grade propylene and 71 cents for chemical grade.
Chemical-grade was settling at 86 cents/lb, also a record high, according to Platts data.
Market participants indicated that seller had yet to agree to the price, preventing propylene from fully settling.
The increases, while expected to be sharp from the start, ended up being 1 1/2 times the initial nominations of plus-10 and plus-11 cents/lb by two major producers.
It marks the second time this year that propylene contract prices saw double-digit hikes. Propylene rose as much as 17 cents to start the year, with January PGP hitting 77.50 cents/lb.
Producers found support for tacking an extra 4-5 cents to the hike on the surging spot prices seen over the past two weeks, which have pushed refinery-grade propylene to all-time highs, above the 80-cent/lb mark.
"There's no propylene out there," a market source said in explaining the market conditions.
At 87.50 cents, PGP surpassed the previous all-time high CP of 85 cents/lb set in July and August, 2008, according to Platts data. Similarly, CGP's contract was breaking through previous record of 83.50 cents/lb seen in July and August, 2008.
The propylene market has remained extremely tight, more recently on the back of strong demand from downstream markets such as ACN and polypropylene, the latter which shot up in March.
That producers have been, until recently, running lighter feedstocks, which has also affected propylene output and availability.
Spot RGP was last assessed Thursday on either side of 83.50 cents/lb. Spot PGP was last heard talked in a range of 86-89 cents/lb for April.
