US propylene price rise due to short supply

US propylene prices rose by 106% m-o-m in January, reaching the same highest level since September 2016, due to low supplies and higher demand.

Prices of propylene have reached unseasonal highs, due to low supply as a result of outages at manufacturing sites in the US. One of the more significant outages was at the Exxon Mobil 800,000 tonnes/year plant in Baytown, Texas, which shut for maintenance following a fire in mid-January.

During Q4 2016, demand for propylene, which is a feedstock for polypropylene (PP), fell as PP manufacturers stopped procurement to reduce the level of year end inventories. But in January, as buyers came back to the market to restock and prepare for the peak summer season, sufficient stocks were not available and prices rose.