Chemical Market Analytics Blog

Podcast: The Olefins Weekly Wrap Up

Podcast by

Pablo Giorgi
Global Olefins

Luka Powell
Financial & Capital Markets

Our podcasts are available on all leading platforms including SoundCloud, Spotify & Apple.

You can also read the transcript of the podcast below.

 

Luka Powell (00:13): Welcome to the Olefins Weekly wrap-up. Today is Friday, January 13th, and I’m your host Luka Powell.

Pablo Giorgi (00:21): And I am Pablo Giorgi

Luka Powell (00:23): 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. We are back this week after a couple of well-deserved weeks off to recharge the batteries, but you know what didn’t take time off and still charges batteries, the energy markets.

Pablo Giorgi (00:53): WTI prices at Cushing for February delivery settled at $78 and 39 cents per barrel on January 12th up almost $5 per barrel from the previous Thursday. Prices have increased even as crude oil inventories continued to rise in the US. Refinery utilization is still recovering from Winter Storm Elliot and went up to 84.1% from last week’s 79.6%. Economic optimism is driving the forecast of increased demand as inflation numbers in the US came lower than expected and Mainland China continues to increase crude imports. December crude imports came at 10.9 million barrels a day up 830,000 barrels per day from the average of 2022 until November. China’s imports are forecast to continue to increase. Henry Hub natural gas prices, continuous contract or March delivery settled at $3 and 35 cents per billion BTU on Thursday, the lowest price since 2021. Winter demand continues to be lower than usual with warmer-than-average temperatures.

Pablo Giorgi (02:06): California’s catastrophic floods are also impacting natural gas demand on the west coast. Finally, the Freeport LNG export terminal still hasn’t received the regulatory approvals to restart operations. The EIA reported natural gas inventories that were 2,902 billion cubic ft 11 more than the previous week, while market expectations were for a flat number. Moving to NGOs, Mont Belvieu ethane prices averaged 26.69 cents per gallon on January 12th, up from 26 flat the day before, but that was the lowest value since May 2021. While other NGLs have been trending higher ethane prices have been decreasing due to lower natural gas prices. On the propane side, Mont Belvieu non-TT barrel prices averaged 81.46 cents per gallon on January 12th. Prices have been increasing due to higher energy prices, but still in the low forties as a percentage of WTI crude oil prices still a very low proportion. That does it for energy. Moving on to ethylene.

Luka Powell (03:17): The US ethylene spot market was very active this week with deals totaling 142 million pounds completed at Texas and Louisiana hubs. Overall, ethylene prices trended higher settling at 18 to 21.12 cents per pound for January delivery and 20.50 cents per pound for February delivery. Multiple operational disruptions and outages going off this week as a result of Winter Storm Elliot on the US Gulf Coast several weeks ago. However, most of the effective steam crackers are now operational and several units a starting this week. As a result of the outages, ethane prices fell while spot Ethylene prices rose week over week giving support to an increase in US GC ethylene margins. Despite the weather-related supply disruptions, the US GC ethylene market is likely to return to long in the medium term. The forecast for ethylene has not changed this week. Check out the Nalo Weekly for more details.

Luka Powell (04:20): The polymer-grade propylene spot market was active this week with volumes totaling 47 million pounds for January delivery. Overall, the prices increased where deals recorded between 37.75 and 39.75 cents per pound for January delivery. In large part, this is due to higher propane prices and tighter supply. The refinery-grade propylene spot market was quiet with no deals recorded for January delivery. On-purpose supply should struggle this month due to ongoing maintenance at investors and Enterprise Bellevue’s PDH units. Steam Cracker Propylene availability is lower than last month due to some lingering winter freeze-related outages. Similarly, refineries’ propylene production is also down to these outages. Most crackers and refineries have already come back online, and the rest are expected to do so soon. Propylene consumption into polypropylene continues to struggle as weak demand is weighing polypropylene operating rates. Additionally, Heartland Polymers integrated PH unit started up this week and the subsequent polypropylene produced will further challenge the US polypropylene market. Most non-polypropylene derivatives are also struggling with weak domestic demand. The polymer-grade propylene price forecast has not changed this week. Check out the Nalo for more information.

Pablo Giorgi (05:47): And with that, let’s wrap up the wrap-up. 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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