Market Insights

Market Insights

Podcast: The Olefins Weekly Wrap Up – Episode 132

Podcast by

Kathy Hall
Executive Director, PetroChem Wire by OPIS

Luka Powell
Financial & Capital Markets

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

Luka Powell (00:19):

Welcome to the Olefins Weekly Wrap Up. Today is Friday, September 1st, and I’m your host, Luka Powell. And welcome back this week to our favorite reoccurring co-host, Kathy Hall.

Kathy Hall (00:33):

Hi. It’s so nice to be back and I hope Pablo is enjoying the break.

Luka Powell (00:38):

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. So, August is generally a quiet month as a lot of people are on holiday. However, with the onset of hurricane season, it’s also a very stressful time to be away from your desk for those of us in commodities.

Kathy Hall (01:07):

But September is here and it’s time to get back to it, back to school, and back to work. I know I’m looking forward to seeing everyone in the markets at the World Chemical Forum, September 12th through 14th in Houston. A great way to really get back into the swing of things.

Luka Powell (01:24):

Speaking of the swing of things, here’s the energy markets. On Thursday, August 31, WTI settled at $81.05 per barrel. The market reflects speculation that Saudi will prolong the 1 million barrels per day reduction until September yesterday, the Energy Information Administration disclosed a decrease of 4.9 million barrels from the previous week, resulting in a total that is 7 million barrels lower than the five-year average Henry Hub. Natural gas settled at $2.77 per million B on Thursday. Meanwhile, the world is watching Western Australia, where turmoil continues as threats of industrial action persist and what that means for global markets considering the plants in Western Australia account for 10% of global production.

Kathy Hall (02:15):

Well, over in the Gulf Coast NGL markets, purity ethane prices kept their strength from last week and stayed in a range of 28 cents per gallon most days this week. Non-TET propane prices saw steady gains in the first part of the week, moving up from 65 cents to nearly 69 cents before retreating to 67/68 cents on Thursday. There was no notable difference between August and September pricing as the month rolled over and September propane was in the 68 to 69 cent range On Thursday afternoon. The strength or price stability came amid another massive build in US propane propylene stocks. While the market had expected inventories to increase estimates of 2.26 million, barrel build turned out to be low as the EIA reported on Wednesday that last week’s inventories grew by a whopping 3.179 million barrels to reach 95.465 million barrels up 32 point 17% year over year. Now on a cents per pound basis, this puts ethane at about 9.50 cents and propane in a range of 15 to 16 cents. So how does that compare to this week’s spot?

Luka Powell (03:31):

Ethylene prices deals in the US spot market this week totaled 124 million pounds completed at the Texas and Louisiana hubs, a significant increase over the prior month. Ethylene prices ranged between 17.75 to 18.50 cents per pound for August delivery. US Gulf Coast ethane and L P G prices showed little movement again this week. Ethylene weighted average cash costs erupt slightly versus last week but remain below the July weighted average. Given the spike in ethane prices last month, a mechanical outage at Nova’s UNA cracker have delayed the start of Nova’s new LLDPE line until September. The severity of the UNA outage is still being determined. For now, reports indicate that Nova Sonia assets are being run with stored ethylene.

Kathy Hall (04:19):

The US polymer grade propylene spot market was steady as she goes, trading multiple times at 32.5 cents per pound. Most trades done this week were for August delivery, while the propylene curve itself has been in a contango shape with prices above 35 cents for first quarter 2024 and above 36 cents for the second quarter. The refinery grade propylene market was also steady this week with the pipeline market still at 10 cents per pound and the non pipeline market at 26.5 Cents. The Chemical Market Analytics propylene forecast has not changed this week, but you should still check out the latest NALO for all the details.

Luka Powell (04:59):

And with that, let’s wrap up the Wrap Up.

Kathy Hall (05:04):

I’d like to remind everyone to join us for the First World Chemical Forum in Houston from September 12th to 14th. In cooperation with the Wall Street Journal, Barron’s and Factiva, hear from your trusted leading energy experts and industry leaders understand how energy and chemical markets are evolving into a fourth historical, industrial, and social revolution with infinite possibilities, get in-depth insights on geopolitics, climate concerns, shifting trade balances and disruptive technologies, and how that is transforming culture, socioeconomics, and market paradigms.

Luka Powell (05:42):

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. If you have any questions or if you’d like us to cover something more specific, you can send us an email. Until next time.

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