Luka Powell
Financial & Capital Markets

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Luka Powell (00:20):

Welcome to The Olefins Weekly Wrap Up. Today is Friday September 08, and I’m your host, Luka Powell.

Pablo Giorgi (00:27):

And I’m Pablo Giorgi.

Luka Powell (00:29):

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. London has hit an unusually late heatwave this week. It’s currently 86 degrees Fahrenheit, and I know for our Houston listeners that might not seem that bad, but I promise it’s different in London!

Pablo Giorgi (00:58):

You must be suffering without air conditioning.

Luka Powell (01:01):

Exactly.

Pablo Giorgi (01:03):

But you know what else is hot? The energy markets!

Luka Powell (01:07):

The major news in the energy markets this week is the announcement on tuesday from OPEC + that Saudi Arabia and Russia have commited to continue their lowered daily output and exports until the end of the year, by 1 million barrels per day (MMb/d) and 300 thousand barrels per day (Mb/d) trespectively. This will be evaluated monthly, depending on market conditions. Furthermore, Energy and stock markets came under pressure following the latest data from China, showing a 9% reduction in the country’s exports, yet a simultaneous increase of 31% of crude imports. On Thursday, September 7, WTI settled at $86.87 per barrel. In Natural gas, Henry Hub settled at 2.58$ per million BTU on Thursday. Meanwhile, there is short-term volatility in the European markets, following the beginning of strikes at Chevron’s Western Australia LNG plants.

Pablo Giorgi (02:02):

Moving to NGLS, Purity ethane prices in Mont Belvieu settled at 30.50 cents per gallon this Thursday, marking a third consecutive weekly gain and picking up 8% compared to the previous Thursday. Non-TET propane crept up to 73.38 cents per gallon, an increase of 5 cent week-over-week on a combination of stronger crude values and a smaller-than-expected inventory build. The EIA reported that US propane and propylene stocks for the week ending September first increased by a minimal 0.5 million barrels, to just below 96 million barrels, well below the market expectation of a 2.2 million barrels build. That does it for energy, now onto ethylene.

Luka Powell (02:54):

Deals in the US spot market this week totaled 54 million pounds completed at the Texas and Louisiana hubs. Ethylene prices on a simple average basis increased, ranging between 19.25-20.25 cents per pound for September delivery. Ethylene spot prices and weighted average cash costs have been rising over the last two weeks along with feedstock and energy prices. As a result, the ethylene weighted average cash cost is expected to rise this month negating any improvement in spot margins. Earlier this week, there was an operational issue at the BASF Total Petrochemicals Port Arthur complex in Texas. Reports indicate that there was a fire and subsequent collapse of a tower in the pyrolysis unit. The extent of the damage to plant operations is still being determined. The ethylene forecast changed this week. See the NALO for more information.

Pablo Giorgi (03:46):

The US polymer-grade propylene spot market was quiet this week, with just 5 million pounds transacted for September delivery. Prices increased to 41.5 cents per pound, as several supply disruptions tightened the market. September refinery-grade was done at 10 cents per pound for pipelines deals, while a railcar deal was done yesterday at 32 cents per pound. Enterprise PDH 1 is still down and is forecast to restart by mid-next week. Dow’s PDH in Freeport came down this Wednesday and is forecast to be down for a week. The fire at the BASF Total cracker is also impacting propylene, as the metathesis unit for propylene production was shut down. The propylene forecast has changed this week, see the NALO for more information.

Luka Powell (04:34):

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

Pablo Giorgi (04:38):

You still have time to register for the First World Chemical Forum next week in Houston. In cooperation with the Wall Street Journal, Barron’s and Factiva, hear from your trusted leading industry 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, social economics, and market paradigms.

Luka Powell (05:16):

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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