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An Analysis by Garrett Velarde


The MMA Producer-Monthly Barge Contract for September settled at $0.495 per pound. This represents an increase of $0.09 per pound from August to September. This is the
largest increase seen since January to February earlier this year.

As of today, the refinery grade propylene (RGP) spot weighted average in October is relatively flat from where it was in September. Polymer grade propylene (PGP) saw some uptick for an October transaction. The spread between RGP and PGP currently rests at $0.14 per pound. C3 derivative demand is stronger than C3 monomer supply as consumers have restored order from Hurricane Harvey faster than producers have.

Domestic acetone supply remains tight at this time. All but one of the domestic producers are up and running. However, rates are reduced due to logistical and feedstock issues courtesy of Hurricane Harvey. Even with all the cumene plants in the US Gulf Coast now operational after 75% of
cumene producers were down after Hurricane Harvey, cumene barges have struggled to make it to the homes of non-integrated phenol/acetone producers. The Midwest phenol/acetone producer not up and running owes lack of
production to delayed cumene barges from the USGC. We expect acetone to remain tight for the remainder of October.

Spot domestic truck and rail buyers saw increases ranging from $0.06-0.13 per pound over September. One domestic producer has announced an increase of $0.06 per pound effective on October 6th. The Distribution Buyer increased more than we thought for the mid-September report. This settlement went from a range of $0.43-0.48 to $0.56-0.685
per pound from the beginning of September to the middle of September. The latest publication held the Distribution Buyer at $0.56-0.685 per pound.

The author of this monthly update predicted September’s settlement to be between $0.46-0.48 per pound. Well, we did not factor in the lower RGP trades from August worked out
of the volume-weighted average prior to the September acetone settlement. Shame on us. We don’t anticipate much movement at all for the October Monthly-Barge Contract




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