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An Analysis by Garrett Velarde


The MMA settlement for May was unanimously decided at $0.495 per pound. This represents an increase of $0.045 per pound from the April settlement. The half dollar is knocking on the door again!

The refinery grade propylene (RGP) movement in May danced to a different tune than the MMA settlement. RGP pricing increased approximately $0.07 per pound on a 45 day weighted average. In the latest trades, RGP pricing has moved up an additional $0.04 per pound. Polymer grade propylene (PGP) is rumored to be tight so splitters must be back in action purchasing RGP. Power-related issues continue at a couple USGC refineries, which limits RGP production. Did I mention WTI is near $70/bbl?

Imports continue to be the critical word when discussing domestic acetone. March’s acetone imports set a new record (beating out January 2018) for the USA for as far back as we can see. April’s imports are expected to be about half the March import volume. Globally, phenol margins are solid, so acetone needs to find a home to keep the strong operating rates up.

The domestic truck and rail market saw two rounds of increases between mid May and early June. Collectively, acetone producers and marketers will be up $0.09-0.10 per pound. With propylene trading higher, we would not be shocked to see a third round of increases for mid-June.

We predicted May’s settlement to be an uneven stair step up from April’s settlement. We’ll give ourselves a cookie. For June we see a half dollar settlement plus some extra
change. Welcome to summer all!




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


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