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Propylene inventories drop for fifth week

 

HOUSTON, June 12, 2019 (OPIS PCW)--US nonfuel use propylene inventories trickled lower by 15,000 bbls (-0.3%) last week to 4.869 million bbls, the EIA said today. It was the fifth consecutive inventory draw, and propylene stocks have fallen in ten of the past 12 weeks. Propylene inventories are now only 539,000 bbls (12.5%) higher than their 52-week average of 4.33 million bbls. Meanwhile, US Gulf refinery utilization was off 0.2 percentage point at 94.2%, which is above the 5-year average for this time of year. 

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-- David Barry, david@petrochemwire.com  

Copyright, Oil Price Information Service 


US Spot Ethylene Hits New Low as Bearish Fundamentals Converge

June 4, 2019

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U.S. spot ethylene traded down to new lows on Monday, with a deal in Mont Belvieu at 11.75cts/lb. and Louisiana ethylene trading down to 12.125cts/lb. in the Choctaw hub.

These prices are the lowest recorded by OPIS PetroChem Wire; this data history dates back to July 2007.

The lows are not entirely surprising, as spot ethylene has steadily been trading down from 18cts/lb. at the start of the year. Driving the trend were the classic fundamentals of any bear market: increasing supply, decreasing demand and falling upstream prices.

As more ethylene and downstream capacity comes online, more power comes into the consumer side, which naturally leads to lower pricing. A few other factors have added to the bearish pall hanging over ethylene in recent months:

  • Ebbing downstream export demand. The U.S.-China trade situation has resulted in fewer exports of finished goods to the U.S. from China, and by extension, lower demand in China for U.S. polyethylene resin. While polyethylene producers report that domestic demand has been decent, 2.37 million mt/yr (5.22 million lbs./yr) of new capacity is scheduled to start up in 2H 2019. Export requests have slowed, and prices are falling worldwide. Facing the new supply hitting the market and holding onto material that was earmarked for export has created a nervous atmosphere in the plastics markets.
  • Domestic demand from construction stemmed by weather. Heavy rains, frequent storms and flooding have jammed up construction projects throughout the U.S. during its busiest season. Plastic pipe markets (PVC and polyethylene) in particular have been hit the hardest, as wet soil results in delays in not just construction activity but also in agricultural planting schedules. Pipe manufacturers report slowdowns in the municipal, conduit and irrigation pipe demand.
  • Slower demand from flooring, window, door, siding and decking sectors. Producers of these products report that changes in U.S. income tax returns have resulted in a drop of home improvement projects, and a need for their products during 2Q when most citizens typically receive (and spend) their tax returns.
  • Low feedstocks pricing. May was a brutal month for heavier NGLs, as propane slipped below 50cts/gal and butane dropped below 60cts/gal. Ethane has managed to stay above 20cts/gal. Ethylene production costs based on ethane as a feedstock were slightly above break-even levels (relative to spot ethylene) and were under water using propane or butane.

Propylene prices were also falling Monday, but were still significantly higher than ethylene and they remained attractive co-product markets. Polymer-grade propylene was offered down to 34.25cts/lb., 2cts/lb. below where it traded on Friday, but bids have not come above 33cts/lb. With propane in the mid-to-upper 40s cents per gallon range, ethylene at 11.75cts/lb. and refinery-grade propylene at 24cts/lb., PGP margins were relatively healthy using any production method (PDH, metathesis, splitting).

Butadiene pricing was also relatively strong, with June contracts set at 46cts/lb.

– Kathy Hall, kathy@petrochemwire.com  

Copyright, Oil Price Information Service 


US nonfuel use propylene supplies drop for third week

HOUSTON, May 30, 2019 (PCW) -- US nonfuel use propylene inventories last week fell 276,000 bbls (-5%) to 5.242 million bbls, the EIA said today. It was the third weekly draw in a row, and the tenth draw in the past 12 weeks. Propylene inventories are still 988,000 bbls (23.2%) above the 52-week average of 4.254 million bbls. Meanwhile, US Gulf refinery utilization climbed 1.0 percentage point to 94.8%, which is above the 5-year average for this time of year. 

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-- David Barry, david@petrochemwire.com  

Copyright, Oil Price Information Service 

 


US nonfuel use propylene supplies drop for second week

HOUSTON, May 22, 2019 (PCW) -- US nonfuel use propylene inventories were lower for a second week, falling 78,000 barrels (-1.4%) to 5.518 million barrels last week, the EIA said today. Inventories have declined in ten of the past 12 weeks, but they remain at historically high levels. Meanwhile, US Gulf refinery utilization was 0.3 percentage point lower at 93.8%, 1.5 percentage points higher than the five-year average for this time of year. 

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-- David Barry, david@petrochemwire.com  

Copyright, Oil Price Information Service 


Ineos declares force majeure on PP

HOUSTON, May 21, 2019 (PCW) -- Ineos has declared force majeure on polypropylene, citing an equipment failure and related mechanical breakdown on May 18, which resulted in limited operations and reduced production capacity.

The company did not specify which unit was affected.

Ineos has 1.8 billion pounds/year of US PP capacity, according to a 2017 presentation, including 510 million pounds/year in Carson, CA, 320 million pounds/year at the Battleground manufacturing complex in La Porte, TX, and 970 million pounds/year in Chocolate Bayou, TX.
The company has been conducting scheduled maintenance at the Carson, CA PP plant since April. A restart schedule for the facility has not been confirmed. 

-- David Barry, david@petrochemwire.com  

Copyright, Oil Price Information Service 


US nonfuel use propylene supplies resume decline

HOUSTON, May 15, 2019 (PCW) -- US nonfuel use propylene inventories fell 158,000 barrels (-2.7%) last week to 5.596 million barrels, the EIA said today. Inventories have declined in nine of the past 12 weeks, but remain 1.438 million barrels (34.6%) above the 52-week average of 4.158 million barrels. Meanwhile, US Gulf refinery utilization popped up 2 percentage points to 94.1%, above the five-year average for this time of year. 

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-- David Barry, david@petrochemwire.com  

Copyright, Oil Price Information Service 



US polypropylene imports rebound in March


HOUSTON, May 9, 2019 (PCW) -- US polypropylene (PP) imports were up nearly 20 million pounds in March at 119 million pounds, the US Department of Commerce reported today.

PP import volumes were resilient in the face of declining cost competitiveness of imported versus domestic resin since late 2018.

The HoPP FOB Houston-CFR Southeast Asia spread ranged between 10-15 cpp for much of 3Q and 4Q 2018, providing an economic incentive for PP imports to the US. That differential fell to less than 5 cpp in Jan 2019 and became negative in February as US propylene and PP values declined.

March PP homopolymer imports were up 8 million pounds at 63 million pounds, while propylene copolymer imports were up 10 million pounds at 55 million pounds.

Total imports were still shy of the recent peak of 150 million pounds recorded in January, but higher than the twelve-month average of 115 million pounds.

Meanwhile, US PP export shipments in March were up 15 million pounds at 307 million pounds, slightly above the twelve-month average of 295 million pounds/month.

-- David Barry, david@petrochemwire.com  

Copyright, Oil Price Information Service