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An Analysis by Garrett Velarde


The MMA settlement for April was unanimously decided at $0.45 per pound. This represents an increase of $0.025 per pound from the March settlement. A $0.025 per pound move up or down is the popular trend over the last three months. Let’s take a peek at what looks to be an interesting May.

The acetone settlement, once again, mirrored the refinery grade propylene (RGP) price movement (approximately $0.025 per pound up) on a 45 day weighted average. Since mid to late April, all grades of propylene have been reportedly tight as bids continue to move up against few offers. RGP
is now pegged approximately $0.075 per pound above where it was a couple weeks ago. Limited trades have been seen for both polymer grade propylene (PGP) and RGP. There have been several issues reported at refineries across the USGC that have no doubt had an effect on not only RGP, but also gasoline prices.

Last month’s report had domestic supply centered around the word imports. Well, those imports certainly slowed down after December of 2017 and January 2018. Those two
months set high records while February set a low that had not been seen in quite some time. March’s imports are rumored to be up but that would work to offset the planned
turnaround from a major USGC phenol/acetone producer. We believe the acetone tanks are not all as full as everyone so believes.

The domestic truck and rail market saw a bit more taken off the table at the beginning of April. However, in the last week, several major producers and two marketers (including ourselves) have announced increases ranging from $0.04-0.06 per pound effective from dates ranging from May 4th to
May 15th. These days of spot truck buyers and contract barge buyers receiving similar pricing (or netbacks) are drawing to a close.

We predicted a flat line for April’s settlement. Eh, near miss. For May, we are predicting another stair step up from April. We won’t say if all stairs’ heights are created equal though. This step may require some more use of the quads and hammies!




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