Daily Chemical Reactions

They’re Always After Me Lucky Charms! – US Propylene Price Surge Faces Supply Response, Derivative Sogginess
March 17, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
LyondellBasell, ExxonMobil, Braskem, Invista, Dow, Enterprise Products, PPG, Ineos, BASF, Alcoa, Bechtel, TotalEnergies, Sinopec, GAIL, Shell, Milliken, NextDecade, US Steel, Nucor, Evonik, Chemours, MAN Energy Solutions, Rio Tinto, Enviva, EDF Renewables, Toray, Toyo Ink, Stahl, Indorama Ventures, Polymateria, Air Liquide, Gulf Coast Sequestration, Climeworks, Battelle, Heirloom Carbon, FedEx

Daily Chemical Reaction

They’re Always After Me Lucky Charms! – US Propylene Price Surge Faces Supply Response, Derivative Sogginess

Key Points:

  • US spot polymer-grade propylene prices have surged YTD relative to overseas markets, and we flag positive US production economics and global capacity additions likely to reverse this trend.
  • During the past thirty days, Brent Crude and Ex-US naphtha values have fallen relative to US natural gas and USGC ethane values, suggesting headwinds for domestic chemical profit.
  • The decrease in crude oil favors US refinery economics (Ex. #3), and lower propane prices have favored domestic PDH profitability (Ex. #5), incentivizing more propylene production near term.
  • We highlight the EIA annual energy and CO2 emissions forecasts through 2050, GHG emission estimates by industrial emitter for perspective, and flag robust global energy storage forecasts.
  • The Baltic Exchange Dry Index has surged higher from YTD lows, suggesting dry good demand improvement, especially in China. Western consumer affordability headwinds remain high.

See PDF below for all charts, tables and diagrams


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