Market Insights – June 29, 2015

June 30, 2015 • Posted in Market Insights

Market Insights – Week of June 29, 2015


Energy / Economy Overview

  • Crude oil demand has been strong enough to keep Brent crude prices stubbornly over the $60/bbl mark since April despite strong global production volumes
  • But energy markets remain uncertain:
    • Poor prospects for a near-term agreement with Iran on controls on production of enriched uranium have supported prices; oil prices are expected to drop several dollars when / if there is an agreement and Iranian stockpiles are released into the market
    • This week’s economic focus will be firmly on Greece following this weekend’s breakdown in negotiations with creditors and the imposition of capital controls; failure to reach an agreement will mean default, a possible exit from the Euro, and more uncertainty for the global economy

WTI Crude Oil And Brent Crude Oil 063015
IHS Intel – Ethylene / Polyethylene

  •  June ethylene NT contract price has not been settled

May ethylene NT contract marker price settled at 34.5 cpp

June NT price is still forecasted to drop 0.5 cpp to 34 cpp

NT contract prices are expected to range from 34 to 37 cpp over the balance of 2015 as there will be little change in cash costs

  • May PE contract prices settled up 5 cpp
  • June PE prices will settle flat
  • All US based ethylene capacity is up and running for the first time in two years
  • All US based PE production capacity is also believed to be fully operational as ExxonMobil lifted the Baton Rouge force majeure declaration this week
  • Major producers have announced a 5 cpp increase eff. July 1
  • In China PE prices were stable to up last week on firm ethylene prices
  • Prospects for the announced July 1 North American PE increase could be impacted by developments in export markets through the month of June

IHS Intel – Styrene / Polystyrene

  • Benzene spot prices closed at $3.03/USG last Thursday night ($0.78/USG above June contract settlement of $2.25/USG
  • With the styrene monomer industry running at full capacity, PS prices will see downward pressure in July
  • However, the fly-up in spot benzene prices may dampen that pressure
  • CDI posted PS down 5 cpp in June and IHS is likely to follow
  • Current IHS forecast calls for HIPS to drop by 8.74 cpp between now and December 2015

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