Welcome to Market Horizons. Our monthly newsletter is written by our knowledgeable business directors and explores the latest in market trends.





An Analysis by Garrett Velarde


The MMA Producer-Monthly Barge Contract for February settled at $0.49 per pound. This represents a $0.14 per pound increase from January to February. This settlement change marks the largest move month to month since April to May of 2012.

The refinery grade propylene (RGP) spot weighted average increased $0.16 per pound from mid-month January to mid-month February. Since then, RGP has crept up even further. Current pipeline transactions for RGP are at $0.42 per pound for March deliveries. The low point for RGP in this cycle was at $0.16 per pound in a December trade for January delivery. Refineries are going through maintenance
season to gear up for the summer driving season. This has kept RGP supply limited. Polymer grade propylene (PGP) is currently at a $0.10 per pound premium to RGP. This is a typical delta we are accustomed to. The anticipated start-up date for the new propane dehydrogenation (PDH) unit is now late Q2. This delay continues to leave a contracted seller in the spot market buying pounds.

Acetone supply remains tight globally. Phenol continues to be the reason for it. Demand for phenol worldwide is low. There is no better example of this than Asia’s predicament. Phenol plants were idle during the Lunar New Year. The associated feedstock to phenol, benzene, shot up approximately $1/gallon in the mean time. This took benzene buyers by surprise and resulted in purchasing managers
scrambling trying to see if this was a sick joke after a week of booze and festivities. Well, it was not and it caused phenol production to drop. If phenol production
drops, then acetone production drops. In turn, acetone pricing in Asia rose. However, the arbitrage to the US for Asian acetone remains closed. FOB pricing in Asian is around $0.44 per pound. After duty and freight, Asian acetone can land in the US just over $0.50 per pound. This currently cannot compete with US acetone. On the other hand, European acetone can land in the US more competitively. However, there is no European acetone to spare for the states right now.

The domestic acetone truck and rail market has seen additional increases effective anywhere from March 1st to March 15th. These increases have been to the tune of
$0.05 per pound for the most part. The Distribution Buyer (formerly known as the Small-Medium Buyer) is now posted at $0.55-0.61 per pound. This is an increase of $0.07 per pound from mid-February using the average of the ranges. Demand in the truck and rail sector appears modest as distributors and end users gage whether we are in a short-term pricing phenomenon or if more expensive acetone is here to stay. Phenol demand in the states will need to pick up if more acetone is to be made available for large and small buyers alike.

The author of this monthly update predicted February’s settlement to go up more from January to February ($0.14 per pound) than from December to January ($0.0581 per pound). We will give ourselves a pat on the back. For March’s MMA Producer-Monthly Barge Contract, we predict an increase of $0.03-0.05 per pound from February’s settlement. The continuing RGP run uphill and lingering acetone supply issues are the root causes for this prediction.




The Plaza Group · 1177 West Loop South, Suite 1450 · Houston, Texas 77027

Phone (713) 266-0707 · Fax (713) 266-8660 · Orders (800) 876-3738 · Email contact@theplazagrp.com


© 2017 The Plaza Group. All Rights Reserved. Website by Dzine Works