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An Analysis by Garrett Velarde


The MMA Settlement for February was unanimously decided at $0.3525 per pound. This represents a decrease of $0.0075 per pound from January’s settlement. Crude oil pricing increased over the course of February, but early March indications point to a more bearish market. How will propylene react and influence the March MMA settlement?

The refinery grade propylene (RGP) movement for the latest 45-day volume weighted average was down approximately $0.015 per pound compared to the previous 45-day volume weighted average. Thus, approximately a factor of 0.5 was used in the settlement for MMA producers in February. Since this time, RGP has slightly decreased for March trades. A lot of bearish trades were done on the back of EIA postings of increased propylene inventories in early February as well AFPM postings of dramatically increased inventories of propylene in Q4 2018. Polymer grade propylene (PGP) has since been flat, pushing the margin for splitters upwards. PGP futures remain well above current trade levels.

Acetone imports for 2019 remain unknown at this time with the government shutdown. The April acetone market update will be able to identify imports into the USA for early 2019. Imports in the USA in 2019 will likely be the driving question as three domestic phenol/acetone producers have filed anti dumping duties against six countries: Belgium, Korea, Saudi Arabia, Singapore, South Africa, and Spain. These three domestic producers allege these six countries sold acetone into the USA at unfair market prices. For any more information, please contact your sales representative at The Plaza Group.

The domestic truck and rail market has shown strong demand for the start of 2019. However, the competitiveness in this distribution space remains strong like last month. With a dropping MMA settlement, contract pricing competitiveness is getting stronger. Phenol demand remains strong, but uneasiness still lingers about the continuation of a strong Asian economy.

We predicted the February MMA contract price would settle close to where the January MMA settlement did. Pretty stable once again. RGP came down a little bit since the last writing. However, we don’t see much more room for RGP to fall further down. We predict March’s MMA settlement will be down slightly from February’s. The March MMA settlement could likely be the bottom before Q2 takes a turn the other way.




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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