The acetone settlement for August was unanimously settled at $0.58 per pound. This is a roll from July’s settlement. Asian acetone imports tempered the price increases announced for late August and early September.
The refinery grade propylene (RGP) movement for the latest 45-day volume weighted average was flat compared to the previous pricing window. Since the August settlement, RGP has been thinly traded. RGP trades by railcar have gone down while RGP trades by pipeline have gone up slightly. RGP railcars demand a premium over pipeline by approximately $0.20 per pound now. Polymer grade propylene has softened about $0.07 per pound since last month’s report.
August imports recorded at approximately 13,000 MT’s, which is 30% below July’s imports. The usual countries of Germany, Japan, South Korea, and Taiwan brought in August’s imports. Asian import pricing has come down further since last month’s report. This leads us to believe we will see stronger months of importing in November and December.
One domestic producer remains on force majeure from Hurricane Beryl and another producer is currently in a planned 45-day turnaround ending in late October. The Feds interest rate cut of half a percent is not expected to much improve construction demand, a key industry sector for phenol. We don’t expect domestic production rates to change much in the coming months.
We called for a rollover or small increase for August’s settlement. For September, we expect either a rollover or a small decrease. Balancing volatile propylene pricing while being mindful of Asian length in acetone will be crucial moving forward for the domestic settlement.
