The US propylene market closed last week on a mixed note, with Polymer Grade Propylene (PGP) prices edging higher while Refinery Grade Propylene (RGP) values held steady. Market participants reported that tighter supply conditions combined with resilient automotive demand were key drivers behind the modest rise in PGP, even as overall market fundamentals remained fragile.
According to an industry source who spoke on condition of anonymity, the increase in PGP prices was largely attributed to supply constraints caused by multiple plant shutdowns. Despite high inventory levels, demand from the automotive sector was strong enough to lend support. At the same time, rising costs of feedstocks such as naphtha and crude oil also provided upward momentum, pushing PGP prices higher compared to the previous week.
The broader energy complex added to the pressure on costs, with crude oil holding firm in August as inventories declined. Higher feedstock prices increased manufacturing expenses, and with producers already operating at restricted output levels, concerns over potential disruptions from the looming hurricane season added another layer of risk to the supply outlook.
Nevertheless, the spot market remained subdued. Trading activity was muted, with limited purchasing interest as buyers showed little urgency to secure volumes. Market participants highlighted that the market continues to suffer from oversupply conditions, with downstream demand remaining weak. As a result, expectations for a near-term rebound in derivative markets remain minimal, keeping overall sentiment cautious.
By the end of the week, Polymer Grade Propylene spot delivered prices were assessed in the range of 32.50–33.00 cents per pound FD US Gulf, reflecting a week-on-week gain of 1.00 cent per pound. In contrast, Refinery Grade Propylene prices held steady at 31.50–32.00 cents per pound FD US Gulf, showing no change from the prior week.
In the contract segment, US propylene prices for August 2025 settled lower. Polymer Grade Propylene contracts were agreed at 35.50 cents per pound, while Chemical Grade Propylene settled at 34.00 cents per pound. Both represented a decline of 2.00 cents per pound compared to July 2025 settlement levels, underlining the broader weakness in derivative demand despite short-term support from supply constraints.
The market now faces a period of uncertainty, balancing between the upward pressure from supply-side risks and the dampening effect of weak downstream demand. Traders and producers alike are expected to keep a close watch on seasonal weather disruptions, inventory levels, and the pace of recovery in end-use markets to gauge the future direction of prices.
