The reduced refinery rates in the US have affected the spot price of refinery-grade propylene (RGP), market sources told SSESSMENTS.COM. The spot RGP price stood at 17.5 cents/pound FD USG on Friday, 0.75 cents higher than Thursday and 4.5 cents than the prior week. The price on Friday also exceeded the previous year-to-date peak of 16.5 cents/pound recorded on January 2.
Data from the Energy Information Administration (EIA) showed that refinery utilization rates in the US fell 1.5% week-on-week to 67.6% last week. Reduced refinery rates mean that upstream players produce less propane, resulting in a reduced supply of propylene which props up prices.
Three weeks earlier., domestic RGP prices fell to 9.25 cents/pound, the lowest price since 2002, but has recovered 8.25 cents or 89.2% ever since. Higher RGP pricing also narrowed the spread between polymer-grade propylene (PGP) and RGP. The April RGP price was at a 7.5-cent discount to PGP, compared to a 10.5 cents/pound discount a year ago.
