Published On: Wed, Mar 25th, 2009

U.S. Markets 24-Mar-09

Refinery grade propylene traded several times Tuesday and ethylene traded once. NGLs were mixed and spot resin trading was slow.
March RGP traded at 20.375 cpp and 20.5 cpp, both for confirmed pipeline delivery. April traded at 20.5 cpp. The day ended with March and April bid at 19 cpp and offered at 22 cpp. RGP prices are down from a 2009 high of 24.5 cpp reached on Feb 18. March polymer grade propylene was bid at 25 cpp for rail delivery against no offers.

Ethylene traded at 23.75 cpp for March (Wms system). March last traded Monday at 23.25 cpp (FOB Mont Belvieu). The day ended with March bid at 22.75 cpp (Eq system) and 23 cpp (Wms system) and offered at 24.5 cpp. April was bid at 23 cpp (Eq system) and 23.25 cpp (Wms system) and offered at 24.25 cpp (Wms system). Bids and offers were seen on a formula basis stretching out through the end of the year.
In production news, Shell’s GO-1 cracker in Norco is expected to restart in mid-to-late April. The company restarted its OL-5 cracker at Norco earlier in March. LyondellBasell will permanently close its Chocolate Bayou olefins complex by Aug 4, 2009. The plant was shut in mid-December. The idling of the Chocolate Bayou cracker reduces LyondellBasell’s ethylene capacity in Texas to slightly more than 7 billion pounds per year. LyondellBasell still produces nearly 13% of the total ethylene capacity in the Gulf coast and about 17% of Texas capacity. Eight ethylene production units are currently shut in the Gulf Coast, which represents 12.5% of Gulf coast ethylene capacity, or 7.2 billion pounds per year. At the end of 2008, 27% of Gulf Coast ethylene capacity was shut.
Energies and NGLs were mixed. Crude oil was up 18 cents at $53.98/bbl. Natural gas gained 5 cents closing at $4.347/mmBtu. Ethane rose 0.125 cents to end the day at 35.625 cpg. Propane fell a half cent to end at 74.25 cpg. Butane shed 0.75 cents to close at 90.5 cpg. Iso was a penny lower at 106.5 cpg. Natural gasoline was flat at 110 cpg.
Spot resin trading was slow Tuesday and spot prices have been stable so far this week, traders said. Processors lean on inventory continue to search for small volumes but said they do not want to take on inventory. Some traders said that warehouse material is less available this week, and also that not many fresh railcars are being shown to the market. HDPE blow mold and HDPE injection are in the high 30s cpp to low 40s cpp, while LLDP film is in the low-to-mid 40s cpp range. HoPP is in the low-to-mid 30s cpp and CoPP has maintained a premium of about 2 cents.