Podcast: The Olefins Weekly Wrap Up – Episode 135
Financial & Capital Markets
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Luka Powell (00:15):
Welcome to the Olefins Weekly Wrap Up. Today is Friday, September 29, and I’m your host Luka Powell.
Pablo Giorgi (00:23):
And I am Pablo Giorgi.
Luka Powell (00:26):
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. I think the biggest news this week is that Taylor Swift put Travis Kelce and the NFL on the map.
Pablo Giorgi (00:49):
Wait a minute, they were already on the map.
Luka Powell (00:53):
Well, they were obviously already on the map, but they made it to my map and so I guess the ratings are going to new highs now.
Pablo Giorgi (01:02):
But you know what else is going to new highs? The energy markets!
Luka Powell (01:08):
WTI settled at 91.71 on Thursday September 28, settling $1.97 lower than the day before which hit a 10-month high. The EIA announced this week that there was a 2.2 MMbbl decline in US commercial crude oil inventories for the week ending September 22. Henry Hub natural gas settled at 2.95 $ per million BTU on Thursday September 28. Gas injections into storage are reported at 90 billion cubic feet (Bcf) for the week ending 22 September, which is slightly higher than the five-year average of 79 Bcf, sending the total to a reduction of 48 stocks to 3,359 Bcf. Currently, the average rate of injections into storage is 7% lower than the five-year average.
Pablo Giorgi (01:52):
Moving to NGLS, Purity ethane prices in Mont Belvieu settled at 27 cents per gallon this Thursday, another drop this past week, reducing the frac spread against natural gas to just under 8 cents per gallon, against more than 14 cents per gallon 2 weeks ago. Non-TET propane settled at 72.875 cents per gallon on Thursday, an increase of a couple of cents week-over-week.
That does it for energy, now onto ethylene.
Luka Powell (02:20):
Deals in the US spot market this week totaled 45 million pounds completed at the Texas and Louisiana hubs, 30 for September delivery and 15 for October delivery. Ethylene prices ranged from 20-21.75 cents per pound (cpp). Steam cracker operating rates are forecast to be below 80% this month for the first time since March due to inventory pressures and a number of planned and unplanned outages. The BASF Total and Nova Corunna crackers remain down due to operational issues, while the Shell Deer Park cracker is expected to be back up in December.
Add to that a couple of planned turnarounds in September and about 12% of USGC ethylene capacity is offline. Consequently, inventory is expected to have peaked after increasing since April. Ethylene weighted average cash costs decreased this week due to lower ethane prices. The strike of the US automotive unions is making with ethylene and derivative markets uneasy about the consequences of a prolonged and expanded strike.
The ethylene forecast hasn’t changed this week. See the NALO for more information.
Pablo Giorgi (03:28):
The US polymer-grade propylene spot market was active this week, with 17 million pounds transacted for September delivery and another 17 million pounds for October delivery. Prices increased from 39 cents per pound last Friday to 41 cents per pound this Thursday. October refinery-grade was done between 32.5 and 33.75 cents per pound for railcar deals, totaling 49 thousand barrels. On operations, Enterprise PDH 1, that was down since August 24th came back up last weekend. BASF Total cracker remains down, as well as Shell’s Deer Park. On the demand side, ExxonMobil continues the startup process at their polyolefinic elastomer Vistamaxx unit.
The propylene forecast has changed this week, see the NALO for more information.
Luka Powell (04:15):
And with that, let’s wrap up the Wrap Up.
Pablo Giorgi (04:20):
Come see us at APLA in Sao Paulo from November 11 to 14.
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