Daily Chemical Reaction
Left and Right – Chemical Prices Follow Inputs Lower, US Propylene Markets To Remain Volatile
Key Points:
- US refinery margins remain elevated and in favor of chemical production. We discuss its impact on propylene supply and why this market will likely be volatile near term.
- We discuss the notable declines in US natural gas and NGL values WoW relative to Brent Crude and Ex-US naphtha – the trend is positive for US chemical producers.
- US propylene contract prices will fall in September, following the spot market lower, and we discuss why we see limited upside risk in polypropylene (PP) values in 2H22.
- US ethanol prices fell relative to RBOB gasoline WoW and ethanol margins took a step lower. We also highlight recent business updates from Flux Power and Talos Energy.
- North American chemical rail traffic increased notably last week YoY, and YTD trends are also higher. We also discuss relevant housing and freight rate trends.
See PDF below for all charts, tables and diagrams