Podcast: The Olefins Weekly Wrap Up – Episode 123
Financial & Capital Markets
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Luka Powell (00:14):
Welcome to The Olefins Weekly Wrap Up. Today is Thursday June 9th, and I’m your host, Luka Powell.
Pablo Giorgi (00:23):
And I’m Pablo Giorgi.
Luka Powell (00:25):
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 (00:42):
Summer camps are starting here. My youngest son is going to day-camp. It feels like everything is changing, but really everything has actually stayed the same. But you know what else is feeling like it’s stayed the same? The energy markets!
Luka Powell (00:58):
The OPEC announcement of Saudi’s voluntary cut of 1 million barrels a day hasn’t really seen a market reaction. WTI prices for July delivery settled at $71.29 per barrel on Thursday June 8. Rig counts continued to drop in the US, at 696 on June 2nd. Down 15 from the last count on May 26 and a reduction of 31 from last year. These reductions will in turn lead to lower crude production over time. Changes to the rig count typically takes 4-6 months to be reflected in production numbers.
Henry Hub Natural gas closed on Thursday, June 8 at $2.35/MMBtu. For the 15th consecutive session, Asia was the top market for U.S. Gulf Coast LNG across all four loading windows, which is a development that hasn’t occurred since September 2021. However, European gas prices have remained relatively steady in the last two weeks, with the July TTF Futures settling at $8.5/MMBtu on Thursday. This has led to speculation within the industry that the European prices may have bottomed out, with the potential for tightened supply over the next few months.
Pablo Giorgi (02:15):
Moving to NGLS, Purity ethane prices continue to be very stable, going from 20.63 cents per gallon last Thursday, to exactly 20 cents per gallon this Thursday, and staying within that range through the week. Non-TET Propane prices were assessed at 55.75 cents per gallon last Thursday and have increased during the week on the back of the Saudi announced production cuts, going up to 62.06 cents per gallon on Wednesday. On Thursday, propane closed at 59 cents per gallon, as all the energy complex eased the fears of the production cuts. Propane price ratio to WTI crude oil was 34.7% this Thursday, still a very weak pricing.
That does it for energy, now onto ethylene.
Luka Powell (03:02):
Deals in the US spot market this week totaled 115 million pounds completed at the Texas and Louisiana hubs. Ethylene prices decreased, settling at 13.75-16.50 cents per pound for June delivery. Subtle supply builds in the US Gulf Coast continue to have an impact on domestic margins. The Westlake Calvert City ethane cracker is restarting its plant after its planned maintenance last month. Last week it was reported that the Bayport Polymers (Baystar) ethane cracker in Port Arthur will be out for several weeks to work on repairs. The Formosa Point Comfort mixed feed unit restart has been further delayed until September. The Bayport Polymers PE plant is expected to startup next week. In Canada, the new Nova Sarnia 450,000 metric ton per year PE plant is expected to startup in July.
The ethlyene forecast has changed. See the NALO for more information.
Pablo Giorgi (04:04):
The US polymer-grade propylene spot market was quiet this week, with 23 million pounds transacted for June delivery. Price decreased to 32.5 cents per pound this Thursday. The June polymer grade 45-day weighted-average price is 31.77 cents per pound, a decrease of 3.72 cents per pound from the May 45-day weighted-average price.
The refinery-grade propylene spot market was quiet as well, with only one pipeline deal recorded, at 11 cents per pound for June delivery. The June Texas refinery-grade 45-day weighted-average price was 19.44 cents per pound, representing an increase of 1.61 cents per pound from the May 45-day weighted-average price. Heartland Polymers’ propane dehydrogenation (PDH) unit continues its unplanned maintenance turnaround and is now estimated to come back up in the last week of June. Dow’S FCDh unit reportedly started up in Louisiana last week. No major turnarounds are in the outlook.
The propylene forecast has changed this week, see the NALO for more information.
Pablo Giorgi (05:04):
And with that, let’s wrap up the Wrap Up.
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Luka Powell (05:50):
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