US propylene inventories continued to shrink this week, falling roughly 9% to 2.566 million barrels for the week ending August 13, according to data posted by the Energy Information Administration (EIA).
Inventories shed 255,000 barrels to close the week, following a drop of 216,000 barrels the week ending August 6.
Meanwhile in spot, the spread between RGP and PGP continued to hover just above 13 cents/lb this week as RGP slipped. Since the beginning of August, the differential has widened by 2 cents but is still far off the roughly 30 cents/lb spread back in early April, when spot PGP prices were close to 80 cents/lb.
Historically, the spread between RGP and PGP has been closer to 3 cents/lb. In mid-February the gap widened as lower refinery rates, steam cracker operators’ preference for lighter feeds, and limited splitter capacity to convert RGP into PGP contributed to higher PGP values.
August spot RGP was last heard traded at 43.75 cents/lb MtB pipe earlier this week. Spot PGP continued to hover near 57 cents/lb MtB pipe with offers last heard at 58 cents/lb MtB pipe against bids at 56 cents/lb MtB pipe.