Living up to its reputation of late as a volatile market, the US propylene market has undergone another major price swing, with February contract prices up more than 16.5 cts/lb ($364/mt) from January levels.
In case you are keeping count (and if you are a propylene buyer, you have to be), February marked the fifth time in roughly a year’s time the market witnessed double-digit price movements in its contract prices.
The latest increases–which left chemical-grade propylene at 71 cents/lb and polymer-grade propylene at 72.50 cents/lb–were supported by spot transactions across all grades of propylene. Things were even more pronounced in the spot market, with refinery-grade propylene, the rawest of the three grades of propylene, surging more than 25 cents/lb in less than three weeks’ time.
They left many a propylene buyer and downstream market participant scratching their collective heads, trying to figure out how to a) digest the increase, b) pass it on to customers c) absorb it and/or e) all of the above.