Podcast: The Olefins Weekly Wrap Up – Episode 118
Financial & Capital Markets
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You can also read the transcript of this week’s podcast below.
Luka Powell (00:07):
Welcome to The Olefins Weekly Wrap-Up. Today is Friday, April 14, I’m your host: Luka Powell.
Pablo Giorgi (00:16):
And I’m Pablo Giorgi.
Luka Powell (00:19):
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 (00:38):
Welcome back, Luka!
Luka Powell (00:41):
Thanks, Pablo. I’m definitely coming back to reality after being on holiday in sunny Arizona and now I am back to harsh London weather and an 8-hour time difference. But you know what else has come back down to earth this week? The propylene market.
Pablo Giorgi (01:00):
But first, the energy markets!
Luka Powell (01:05):
WTI prices for May delivery settled at $82.42 per barrel on April 13 up from $80.70 per barrel last Thursday. The price rally continues following the OPEC announcement to voluntarily cut production by 1.16 million barrels per day, beginning in May.
The Chinese crude oil demand forecast is higher than previously expected. OPEC announced yesterday that it expects China’s oil consumption to grow by 760,000 b/d this year, against a previous estimate, an increase of 710,000 b/d. Chinese demand is therefore expected to grow to 15.6 million b/d .
Henry Hub Natural gas prices settled at $2/MMBtu this Thursday, relatively stable from $2.01/MMBtu last week and down from $2.22 the previous Friday. With weather expected to move into a warming trend, demand levels look to ease into typical spring season levels.
Pablo Giorgi (02:11):
Moving to NGLS, Mont Belvieu ethane prices trended lower this week, going from 21.31 cents per gallon last Thursday down to 19.94 cents per gallon this Thursday. Frac Spreads, the difference between ethane and natural gas prices, continued to go down as well, from the peak of 9 cents per gallon 3 weeks ago, to around 6.5 cents per gallon yesterday.
Propane prices increased slightly this week, moving from 82 to 83.75 cents per gallon for April. That represents 43% of crude oil prices, much lower than historical averages. Propane prices in the Edmonton hub in Alberta, Canada settled yesterday at 65.5 cents per gallon, 22% lower than the USGC. That does it for energy, now onto ethylene.
Luka Powell (03:06):
The US ethylene spot market was active this week with deals totaling 119 million pounds at the Texas and Louisiana hubs. Ethylene prices trended higher this week, settling at 18.75-23.125 cents per pound (cpp) for April. Unplanned outages and delayed restarts continue to alleviate the supply surplus that was anticipated in the US at the start of the year.
The Bayport Polymers ethane cracker remains offline after attempts to restart last month. It was reported last week that the Shintech Plaquemine ethane cracker had to shut down for repairs and the unit is said to remain offline this week.
According to the Texas Commission on Environmental Quality, the Motiva Port Arthur steam cracker was reported down last week in order to perform needed unplanned repairs to the process unit. However, it was said to have restarted its operations earlier this week. Last month, the Chevron Phillips Sweeny 33 unit shut for a planned turnaround and is expected to restart this month. Supply outages continue to support margins and higher effective operating rates. The ethylene forecast has not changed this week. See the NALO for more information.
Pablo Giorgi (04:21):
U.S. Gulf Coast polymer grade propylene prices continued to ease this week. Prices closed this Thursday at 41 cents per pound, down from 42 cents per pound last Thursday. The polymer-grade spot market was quiet this week, with only 14 million pounds transacted for April delivery. The refinery-grade spot market had one railcar deal recorded at 36.50 cents per pound.
Supply continues to improve, now all units that were undergoing maintenance turnarounds are back up and running, including not only Invista’s PDH unit, which came back in mid-March, but also ExxonMobil’s units in Baytown, Texas. All units are reported to be working as planned. Steam cracker propylene availability should decrease in April though, due to a few outages and turnarounds. The propylene forecast has changed, see the NALO for more information.
Luka Powell (05:12):
And with that, let’s wrap up the Wrap Up.
Pablo Giorgi (05:17):
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Luka Powell (06:02):
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