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→ ACETONE REPORT
An Analysis by Garrett Velarde
The MMA settlement for February 2018 was unanimously decided at $0.45 per pound. This is a decrease of
$0.0675 per pound from January 2018.
All propylene grades have come down in pricing since the last writing. With all propane dehydrogenation (PDH) units operational for almost the entire month, polymer grade propylene (PGP) pricing came back down (and then some) to where it was prior to the huge jump in January. PGP
pricing now rests in the mid 40’s on a delivered basis. Refinery grade propylene (RGP) has behaved similarly. Are we at the bottom for propylene? We believe if we are not quite there then we are darn close.
Domestic acetone supply is good right now, but things could change once the inventory from the USGC unit that was brought offline late February starts to ease away. There are reported problems with multiple water locks in the Midwest that could affect inbound cumene shipments. If refinery grade propylene continues to fall and drags acetone down farther, the supply/demand of acetone could jump from slightly long to extremely short. The rest of the world will not ship acetone here if there are higher netback options elsewhere. All of 2017 import/export data is available now. Nearly 325 million pounds of acetone arrived in the USA compared to just over 200 million pounds in 2016. Acetone exports saw an 8% uptick in 2017 from 2016. Approximately 275 million pounds of acetone
left the USA in 2017.
The domestic truck and rail market softened some over the course of February. Domestic producers continue to fight import pricing. The Midwest was seen as the main battleground. It appears we are back in the world of some barge buyers paying similar prices to a highly competitive rail or truck account. All is fair in love and war?
We predicted an ebb in February’s settlement. A drop of nearly 7 cents per pound falls in the ‘ebb’ category in our opinion. For March, we will predict slight movement down due to RGP not showing any pep in its step. However, supply issues will be key to watch and this could lead to inventory issues in the Midwest.
ISSUE: MARCH 2018
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