US propylene inventories drop sharply: CorrectionOREANDA-NEWS. November 06, 2015. Inventories of non-fuel use propylene plunged 274,000 bl to 3.731mn bl the week ending 30 October, according to the US Energy Information Administration.

Non-fuel use propylene inventories now stand at their lowest level since 2 January. Spot polymer grade propylene in Mont Belvieu, Texas, sank to a six-year low of 26?/lb in early September but traded between 28-29.25?/lb during October. So far in November PGP has traded in a range of 29-29.5?/lb.

Similarly, refinery grade propylene fell to a six-year low of 15?/lb in early September but has since recovered. So far in November RGP traded once at 19?/lb for rail delivery.

PGP production from ethylene crackers increased significantly in the summer as the cash cost for cracking propane was more competitive than ethane, however propane's advantage dissipated significantly in late September and for much of October. This likely led to more ethane cracking and less propane cracking, which yields less PGP.

The market is preparing for the introduction of PGP output from Dow, with the company planning to bring a new propane dehydrogenation (PDH) unit online before the end of the year.