Podcast by

Pablo Giorgi
Global Olefins

Luka Powell
Financial & Capital Markets

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

Luka Powell (00:13):

Welcome to the Olefins Weekly Wrap Up. Today is Friday, September 22nd, and I’m your host Luka Powell.

Pablo Giorgi (00:20):

And I’m 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. It seems like the end of summer was officially brought in this week with storms across the UK.

Pablo Giorgi (00:46):

Summer feels like it is ending here too, with cooler weather finally coming to Houston. But cooler is relative, with it still reaching 95 Fahrenheit every day. But you know what else has cooled down over the past few days? The energy markets!

Luka Powell (01:03):

WTI settled at 89.63 on Thursday September 22. On Wednesday, the IEA stated that OPEC+ cuts will result in a tighter market in the fourth quarter. Even though prices are slightly down this week, this could be largely due to the contract prompt month shifting from October to November.

U.S. crude storage numbers continue to decline, down 2.1mm bbls, the lowest in 14 months and 30% lower than one month ago. With the potential supply crunch because of continued OPEC+ production cuts over the next year, inventories are likely to continue to decline.

US crude exports reached a six week high at 5.1mm bpd. According to the EIA, exports of petroleum products set a new record in the first half of 2023. The total petroleum products exports, including crude and refined products reached a record high 6 million barrels a day in the first 6 months of this year.

Henry Hub natural gas settled at 2.61 $ per million BTU on Thursday September 21. The Freeport LNG facility is back to near full capacity and total US LNG exports are expected to hit 13 Bcf/day this fall. Strikes continue at Chevron’s Western Australia plants, which could cause further volatility throughout the markets.

Pablo Giorgi (02:25):

Moving to NGLS, Purity ethane prices in Mont Belvieu settled at 29.63 cents per gallon this Thursday, a drop against last week, following slightly lower crude oil and natural gas prices. The frac spread against natural gas continues to be above 10 cents per gallon, at around 12 cents per gallon now.

Non-TET propane settled at 70.69 cents per gallon on Thursday, a decrease of almost 10 percent week-over-week. Propane prices also decreased as a percentage of the price of WTI crude oil, and that ratio is now 33%.

That does it for energy, now onto ethylene.

Luka Powell (03:07):

Deals in the US spot market this week totaled 59 million pounds completed at the Texas and Louisiana hubs. Ethylene prices on a simple average basis increased, ranging between 21.5-22.5 cents per pound for September delivery.

Steam cracker operating rates are forecast to be below 80% this month for the first time since March due to a number of planned and unplanned outages. The BASF Total and Nova Corunna crackers remain down due to operational issues, while the Shell Monaca 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. The strike from US automotive workers unions escalated this week with olefins and derivatives 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 (04:05):

The US polymer-grade propylene spot market was active this week, with 42 million pounds transacted for September delivery. Prices increased from 36 cents per pound last Friday to 39 cents per pound this Thursday, with continued supply disruptions tightening the market. September refinery-grade was done at 10 cents per pound for pipeline deals, while no railcar deal was reported this week.

Enterprise PDH 1 is still down since August 24th. PDH 2 also had an unplanned outage this week. The fire at the BASF Total cracker is also impacting propylene, as the metathesis unit for propylene production was shut down. On the demand side, ExxonMobil is starting up their polyolefinic elastomer Vistamaxx unit.

The propylene forecast has not changed this week, see the NALO for more information.

And with that, let’s wrap up the Wrap Up. Come see us at APLA in Sao Paulo from November 11 to 14.

Luka Powell (05:06):

And 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.

Save the date for next year’s event on September 9-11, 2024 in Houston!