Market Insights

April 1, 2015 • Posted in Market Insights

Energy and the Economy

  • Oil rose above $45 as the US dollar dropped 1.4% vs. the Euro and other currencies in what is speculated to be a short-term correction
  • WTI (West Texas Intermediate) crude is forecasted to drop to $32/bbl by the end of April as supply will continue to exceed demand.
  • Spot Natural Gas Average rose 30 cents to $2.79 on Friday due to NE cold weather
  • A number of USW (United Steelworkers) refinery locals remain on strike despite a national settlement as they continue to negotiate local issues

Ethylene and Polyethylene

  • Suppliers report an increase in demand in the months of March and April over January and February.
  • February contract ethylene settled down $0.05 cpp to $34.75 cpp
  • PE pricing direction is flat to up, with no downside pressure.
  • Polyethylene price increases in China narrowed the differential with US domestic prices.
  • INEOS announced 4 cpp increases on HDPE effective April 1
  • Ethylene plant turnarounds have begun and are expected to last through early May. These turnarounds will take up to 20% of operating capacity off-line at various times over the next few months.

Propylene and Polypropylene

  • Preliminary ACC data for February indicates high operating rates (87.1%), a domestic sales increase over 9% and a 56mm pound drop in industry inventory to 31.6 days.
  • March propylene monomer settled down 1.5 cpp to 49 cpp
  • Some large converters report being placed on polypropylene allocation as supply remains tight.

Styrene Feedstock and Polystyrene

  • March benzene contract negotiations concluded with a split settlement of $2.04 – $2.08/USG; an increase of $0.03 to $0.07/USG over February’s contract of $2.01/USG
  • Spot benzene ended the week at $2.39/USG
  • Styrolution’s Texas City styrene monomer plant is back in operation
  • April will see the strongest benzene derivative demand of 2015
  • February styrene monomer contract pricing rolled flat from January at 52.5 cpp
  • Rising benzene and styrene monomer prices and improving polystyrene demand could lead to a price increase announcement for April of as much as 3-5 cents per pound.

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