Podcast by

Pablo Giorgi
Global Olefins

Luka Powell
Financial & Capital Markets

Luka Powell (00:18):

Welcome to the Olefins Weekly Wrap Up. Today is Friday, February 9th, and I’m your host Luka Powell.

Pablo Giorgi (00:25):

And I’m Pablo Giorgi.

Luka Powell (00:27):

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.

Pablo Giorgi (00:44):

This weekend is the Super Bowl!

Luka Powell (00:48):

And that is the most watched TV broadcast in America, isn’t it?

Pablo Giorgi (00:53):

Yep. All the football fans will be watching.

Luka Powell (00:56):

And I’m assuming a couple of Swifties as well this year.

Pablo Giorgi (01:01):

Yeah. Well, there’s a lot of excitement around the Super Bowl, especially this year as you mentioned, but very often it’s not an exciting game.

Luka Powell (01:11):

Well, let’s hope that we have a good and exciting game on Sunday. I just wish that Taylor Swift would sing in the halftime show, or at least join Usher.

Pablo Giorgi (01:22):

But you know what else has not been that exciting? The energy markets.

Luka Powell (01:28):

The crude oil markets saw a shift this week with four consecutive daily gains, pushing up NYMEX WTI crude futures by 3.3% to $76.22 per barrel and ICE Brent by 3.7% to $81.63. US crude stocks rose by 5.5 million barrels but remained below the five-year average. Production rebounded to 13.3 million barrels per day, but stable US oil rig counts may limit output growth. Despite recent conflicts and geopolitical risks, global oil supplies have remained stable.

The US natural gas market faces challenges as Henry Hub futures dropped below $2, hitting levels not seen since March 2023. Underground storage withdrawals were only 75 Bcf, well below the five-year average of 200 Bcf, heightening worries about excess inventory. On 8 February, NYMEX Henry Hub futures fell further to $1.917 per MMBtu. Oversupply and lack of demand weigh heavily on the market. Mild temperatures in early February suggest subdued domestic consumption, despite a forecast for colder weather in the next 15 days, which may not be enough to rebalance the market.

Pablo Giorgi (02:51):

Moving to NGLs, ethane prices decreased this week, closing at 19.50 cents per gallon, down from 21.50 cents per gallon last week. The ethane price decrease can be attributed solely to the drop in natural gas prices, as the frac spread (the difference between ethane and natural gas prices) remained stable at around 6 cents per gallon.

Propane prices in Mont Belvieu, dipped to 91.38 cents per gallon this Thursday, down from 93.50 cents the previous week, a 2.3% decline. The benchmark freight rate from Houston to Chiba surged to 92 dollars per ton, a notable increase from 73.50 dollars per ton last week, indicating heightened demand for Asia-bound routes. Reports indicate the Panama Canal has upped its vessel traffic limit to 24 per day from 18, slashing wait times to under 2 days in both directions. With exports to China via the Cape of Good Hope route, Chinese import figures are rebounding to normal levels.

That does it for energy, now onto ethylene.

Luka Powell (04:05):

The week was quiet for ethylene spot deals, which totaled 57 million pounds completed at the Texas and Louisiana hubs. Ethylene prices on a simple average basis increased, ranging between 19.50 and 19.75 cents per pound for February delivery. Ethylene supply along the Gulf Coast is still tight this week, as we are in the middle of a heavy turnaround season that started in the beginning of January and continues throughout February.

This heavy turnaround season, added to the outages caused by the Winter Storm in the middle of January, driving inventory levels to decrease this month to values lower than the 5-year average, but above the 5-year minimum. An increase in operating rates and inventories is expected in the second quarter of the year.

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

Pablo Giorgi (04:54):

The US polymer-grade propylene spot market was active this week, with 54 million pounds transacted. Prices ranged from 48 to 54 cents per pound, with the increase happening mostly by the end of the week, due to operational outages at propylene producers. The February US Gulf Coast PGP 45-day weighted-average price is 50.60 cpp, an increase of 1.83 cpp from the January 45-day weighted-average price.

Enterprise Mont Belvieu still has one rgp splitter down since winter storm Heather, while their PDH 1 went down at the end of this week unexpectedly, causing the price uptick. A turnaround at Dow’s Freeport PDH unit began last week, while Enterprise has its PDH 1 turnaround scheduled for early March.

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

Luka Powell (05:57):

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

Pablo Giorgi (06:01):

Join us at the Global Plastics Summit from February 27th to 29th in Houston, Texas. Come see leading global experts discuss pivotal impacts and initiatives shaping the plastics industry.

Luka Powell (06:14):

Don’t forget to subscribe to our podcast on SoundCloud, Spotify, apple, or Google Podcasts or wherever you get your podcasts. 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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