US spot polymer-grade propylene prices continued to edge lower Monday, shedding an additional 9.4% from Friday’s assessment amid continued talk of improving supply and weaker demand from downstream producers.

S&P Global Platts assessed prompt-month PGP at 57.5-58 cents/lb ($1,267.65-$1,278.67/mt) FD USG, down 6 cents/lb from Friday, while the forward month was assessed at 57.25-57.75 cents/lb, down 6.25 cents day on day amid talk of a backwardation forming in the market as expectations for March pricing moved lower.

Prompt-month spot prices are down 15.8% since Thursday, according to S&P Global Platts data. US spot PGP shed 4.25 cents/lb Friday, a drop of 6.25%. Spot PGP hit three-year highs January 22, assessed at 68.25 cents/lb FD USG. Even with the steep drops, spot PGP prices remain at levels last seen in December 2014, according to S&P Global Platts data.

The fall in spot prices comes not long after January propylene contracts settled 9 cents/lb higher Thursday at 59 cents/lb for polymer-grade product and 57.5 cents/lb for chemical-grade product, sources said. It marked the seventh consecutive increase for propylene contract prices, putting them 17.50 cents/lb higher than where contracts began 2017, according to S&P Global Platts data.

Strong propylene pricing in January stifled demand in downstream markets, leading to reduced run rates, particularly for polypropylene, market sources said.

A significant portion of PP contracts in North America remain on PGP-plus formulas, with the premium over the monomer talked Monday at 14-16 cents/lb.

“I think it’s combination of things,” a polypropylene market source said of the declining propylene market. “Prices just got way too high. It was just unsustainable. You’re seeing massive amount of demand destruction all up and down the chain.”

Sources have noted that polypropylene producers have little incentive to produce beyond contractual obligations as buyers were reluctant to take on spot volumes in what is expected to be a declining market. Talk of polypropylene imports from Asia also have begun to surface in the market, with a source noting that resin would likely be arriving in the US between February and April.

The decrease in demand comes after a fire erupted Thursday at Braskem’s polypropylene plant in Freeport, Texas. The status of plant operations was unclear Monday and the company could not immediately be reached for comment. Also, US polypropylene producer Pinnacle Polymers declared force majeure last week, citing production issues from a recent ice storm, sources said.

Additional pressure on pricing comes as Ascend Performance Materials moved up its planned turnaround from April to February at a unit at its Chocolate Bayou facility in Alvin, Texas, a company source said.

Another factor market sources have cited in the rise of propylene prices over the past year — the delayed startup of Enterprise Products Partners’ newbuild 750,000 mt/year PDH unit in Mont Belvieu, Texas — is now producing on-spec propylene, multiple market sources said Monday, with one noting the quality was reached early last week. The much-delayed PDH unit is expected to start up in early February, sources said.

An Enterprise spokesman could not immediately confirm the current operating status of the unit.

Further contributing to the downward pressure being applied on the market is weaker export demand.

The surge in USG propylene prices in December and January led a major propylene buyer in South America to fulfill some of its monomer requirements for February with Europe- and Brazil-origin material instead, a source said Monday. However, in recent days, the buyer had received lower offers for US material, consistent with the recent downward trend in spot pricing in the Gulf Coast.

A trader source noted that there were some inquires from Asia about sending propylene to the US, though that seemed like a less-likely scenario given the transit time and costs associated with such a move, despite an arbitrage being open on paper.