Going the Distance: Freight Takes Its Toll, Supply Misses the Boat

Key Findings

General Thoughts: Global sulfur tightness drove record prices, but US delivery bottlenecks widened price gaps; refinery run cuts could intensify competition between metal leaching and phosphate producers.
Supply Chain/Commodities: A diesel export restriction could briefly reduce Gulf Coast wholesale prices, but prolonged controls could eventually cut refinery runs and tighten the supply of propylene and sulfur.
Energy/Upstream: US propane exports drove the latest inventory draw, but ample Gulf Coast stocks make terminal capacity, rather than production, the constraint connecting Mont Belvieu with Asian buyers.
Sustainability/Energy Transition: Fuel flexibility protects buyers and shifts demand risk to producers, making contracted revenue the strongest evidence that new cleaner fuel projects merit investment.
Downstream/Other Chemicals: Long Atlantic voyages have lifted dry bulk freight despite weak industrial margins, making vessel time a better explanation for the rally than a broad recovery in commodity demand.