While IPA's price hike nomination was presented in early January, U.S. China and spot prices reflect more subtle changes.

Prices did rise in export markets, however, as supply constraints were more pronounced in regions where U.S. producers export, such as Latin America, than in the United States.

Nominations were sought on the back of continued increases in spot prices for propylene, as well as higher prices for the December contract. Propene is a key ingredient in IPA.

The propylene contract settled on December 17, up 10 cents per pound for most market participants. It was the biggest monthly contract price increase since January 2017 and took the contract to its highest level since November 2018.

Spot prices for CGP and PGP have remained stubbornly high in January.

IPA export prices

last week, IPA export prices rose sharply. Meanwhile, U.S. spot prices remained unchanged at 64-69 cents/lb FOB U.S. Gulf. U.S. China prices are up 4 cents/lb ($88 / ton) and are now assessed at 65-69 cents/lb DEL U.S. Gulf.

The IPA export market has been quiet recently, with small volumes and limited activity from U.S. producers to Latin America in the second half of 2020.

However, with rising container costs for global shipping, Latin American buyers may be more affected than those in the US IPA market.

At the same time, Latin American buyers are seeing price increases from suppliers who were previously at the lower end of the market.

IPA exports have historically traded at a discount to U.S. China and spot prices. However, sources noted last week that export prices at a premium to the U.S. Chinese market have occurred, though further confirmation is needed.

Last week, spot export prices rose by 8 cents per pound ($176 per ton) and are now assessed at 60-64 cents per pound FOB US Gulf.

Imports to the United States continue to decline

Imports to the United States continue to decline due to a number of factors, the most important of which is the aforementioned increase in the cost of shipping containers out of Asia through the first quarter of 2021.

Tariffs have also affected the extent of China's imports, which have fallen faster than those of other countries.

Imports have fallen in each of the past four months after peaking in May 2020 and remaining high over the summer.