Market and product

HOUSTON (ICIS)--US April contracts for propylene (PE) settled at a rollover to March, as market participants turned their focus to May pricing, sources said on Thursday.

Producers were initially seeking a 7 cent/lb ($154/tonne, €117/tonne) increase in April. However after ethylene spot prices began to drop by mid-month, producers agreed to push the increase from April to May.

Now, as weak domestic and export demand continues, at least one producer has agreed to push the increase from May to June, while a second producer agreed to split the 7 cent/lb hike with 4 cents/lb in May and 3 cents/lb in June.

Buyers said they expect prices will drop by 2-3 cents/lb in May, as producers try to clear out excess inventories.

"The thought is that over the next two to three months, prices are going to go down by about 10%," said one buyer.

Some buyers had tried to push for a decrease in April, but those efforts were unsuccessful, sources said.

With the rollover, prices for linear low density polyethylene (LLDPE) butene film were at 77-80 cents/lb DEL (delivered) ), low density polyethylene (LDPE) film prices were at 86-88 cents/lb DEL and high density polyethylene (HDPE) blow moulding prices were at 75-77 cents/lb DEL, for small volume buyers, as assessed by ICIS.

Major US PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, NOVA Chemicals, Total Petrochemicals and Formosa.

($1 = €0.76)