Luka Powell
Financial & Capital Markets

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You can also read the transcript of this week’s podcast below.

Luka Powell (00:20):

Welcome to the Olefins Weekly Wrap Up. Today is Friday, May 26th, and I’m your host Luka Powell.

Pablo Giorgi (00:27):

And I am Pablo Giorgi.

Luka Powell (00:29):

And together as Chemical Market Analytics, we recap the top events moving the ethylene and propylene markets over the past week. The design of this podcast is to complement the content from the North America Light Olefins weekly service, otherwise known as the NALO Weekly.

Pablo Giorgi (00:47):

My youngest son had his last day of classes yesterday, and it is Memorial Day long weekend.

Luka Powell (00:53):

We also have our end of May long weekend, which means summer is nearly here.

Pablo Giorgi (00:59):

I need to figure out what I’m doing for the summer, but you know what else needs to figure out what it’s doing for the summer? The energy markets!

Luka Powell (01:09):

WTI prices for July delivery settled at $71.83 per barrel. Prices fell by more than 3% from the previous day on Thursday following uncertainty over the outcome of a scheduled early June meeting by OPEC+ members and concerns over the possibility of a U.S. debt default.

Henry Hub Natural gas prices settled at $2.3/MMBtu this Thursday. As European gas prices continue to plunge, Asia continues to be the most profitable market for US LNG. Our colleagues at the Wall Street Journal reported on Wednesday that the fall in European gas prices has caused some industries to increase production and has allowed European governments to spend much less to support companies and households. The US rig count looks to continue the downward trend and LNG floating storage is down from last week.

Pablo Giorgi (02:03):

Moving to NGLS, Purity ethane prices were very stable this week, going from 21.56 cents per gallon last Thursday, to 21.13 cents per gallon this Thursday, and never leaving the 21 to 22 cents per gallon range. Propane prices fell slightly this week, non-TET barrels were assessed at 62 cents per gallon this Thursday. Inventories in the US were reported at 66.7 million barrels last week, while at the same week last year stocks were 46.3 million barrels. Propane price ratio to light sweet crude oil was 36% this Thursday, highlighting the weakness of the propane prices and the length of the US market.

That does it for energy, now onto ethylene.

Luka Powell (02:55):

Deals in the US spot market this week totaled 111 million pounds completed at the Texas and Louisiana hubs. Ethylene prices settled at 14.75-17.50 cents per pound (cpp) for May delivery. According to a statement by Shell, the company has completed the repairs at its 1.5 million metric ton ethane cracker in Monaca, Pennsylvania and is planning to restart this week. Subtle supply builds continue in the US Gulf Coast that are impacting margins this month. However, the fire at Shell Deer Park on 5 May created a higher floor for ethylene prices.

Effective operating rates for May have been revised lower this week to 89%, down from 91% last month. The Bayport Polymers PE plant is expected to startup in beginning of next month. USGC terminals remain full and monomer exports remain at max rates. Freight rates continue to come down, incentivizing exports to persist, even as prices overseas have fallen.

The ethylene forecast has not changed this week. See the NALO for more information.

Pablo Giorgi (04:06):

The US polymer-grade propylene spot market was less active than last week, with 36 million pounds transacted for May delivery. The refinery grade market had one deal recorded for May delivery. Polymer-grade prices trended slightly down during this week, going from around 36 cents per pound at the end of last week to 34 cents per pound by mid-week, and then up to 35.25 cents per pound on the last deals recorded this Wednesday. There were no deals on Thursday. On operations, Enterprise’s PDH unit had an unscheduled shut down this Thursday morning and is forecast to take a couple of days to come back up.

The propylene forecast has changed this week, see the NALO for more information.

Luka Powell (04:49):

With that, let’s wrap up the Wrap Up.

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Pablo Giorgi (05:27):

Don’t forget to subscribe to our podcast on Soundcloud, Spotify, or wherever you get your podcasts, and give us a like or leave a review if you enjoy it. And if you have questions or want us to cover something more specific, you can send us an email. Until next time.

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