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PGP Monomer Market Faces Upward Pressure as Key Facilities Go Offline

The PGP monomer market is bracing for a turbulent period as several key Petrochemical facilities have gone offline, affecting the Polypropylene supply chain and putting upward pressure on prices. Here's a breakdown of the current situation.

Spot PGP Prices: At the time of print on Wednesday, spot Polymer Grade Propylene (PGP) for prompt September delivery was bid at $.395/lb and offered at $.47/lb. The market stood at just $.33/lb on Friday September 1st, which is the same level as the trailing 45 day average.

PGP Contract Prices: The contract price for August PGP was set at $.345/lb, which was down a half-cent from July. Based on current levels, Sept contracts are already indicated up $.075/lb to $.425/lb, but it is very early in the month and given the volatility, market conditions will surely change.

Dow PDH offline: Dow's Propane Dehydrogenation (PDH) unit came down over the weekend and is expected to be offline for a period ranging from two weeks to two months, straining the supply chain.

Enterprise PDH #1: This unit has been offline for at least a week with no re-start date yet provided. It is often a challenge to restart PDH units and remain consistently operational.

BASF TotalEnergies Petrochemical site at Port Arthur, TX: A fire broke out at one of North America's largest heavy crackers operated by BASF and caused the tower to collapse, adding another layer of complexity to the already tense market. Damage was still being assessed, there is no restart date available, but it will likely not be a quick fix.

The situation warrants close monitoring as any further disruptions could exacerbate an already tight market.

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