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Propylene Weekly

February 15, 2019 | Volume 3: Issue 7

Customer Service | Sales | Editorial www.petrochemwire.com | © 2018—PetroChem Wire Page 1

FEBRUARY 11-15, 2019 PRICE SUMMARY

For PCW's methodology on its assessments and weighted monthly average calculations, click HERE

PGP SPOT PRICE SUMMARY

Spot PGP prices tumbled again this week. Feb MtB-EPC PGP traded at 34.5 cpp on Tuesday and again at that price on Wednesday, flat to where it ended the previous Friday. Feb offers fell to 34 cpp after that but no new trades were seen. The Feb/Mar spread tradedtwice this week at 0.5 cpp contango. Mar was offered down to 34.25 cpp on Friday, which yanked Feb's implied value down to 33.75 cpp. Feb started the month trading at 37.75 cpp.

Paper market trading was quiet for much of the week but a number of trades were concluded on Thurs-day, with 2Q trading three times at 36.125 cpp, 2H trading twice at 39 cpp and Jan 2020 paper trading at 39.75 cpp.

The MTD 30-day weighted average for Feb MtB-EPC PGP was 36.279 cpp, compared with 37.542 cpp in Jan. The MTD 45-day weighted average for Feb MtB-EPC PGP was 36.848 cpp, compared with 37.542 cpp in Jan. In the monthly contract market, no news was heard regarding Feb pricing. Jan con-tract prices were 40 cpp for PGP and 38.5 cpp for CGP.

TRADE VOLUME SUMMARY

MTD trading volume for Feb delivery was 26 million pounds, compared with 36 million pounds for Jan delivery during all of Jan. No forward trading volume has been seen so far this month, compared with 15 million pounds in Jan. MTD spread trading volume was 29 million pounds, compared with 22 million pounds in Jan. MTD index-based trading volume was 19 million pounds, compared with 44 million pounds in Jan. MTD paper trading volume was 91.3 million pounds, compared with 149 million pounds in Jan.

OPERATIONS & NEWS

Overall maximum operating rates for Gulf Coast olefins plants were estimated to be 94% so far in Feb, compared with 96% in Jan. PDH units were understood to be operating normally this week. A communi-ty hotline posted a notice on Thursday that a fire occurred at Chevron Phillips' Baytown, TX facility at approximately 3:30 pm local time. The site contains the company's Cedar Bayou olefins units as well as alpha olefins and PE production. Details of the specific location of the incident were not disclosed, but an all clear was issued shortly after 4 pm. ExxonMobil's Baton Rouge, LA olefins unit was expected to begin flaring today due to a planned shutdown, according to an emissions notice filed to the Louisiana Department of Environmental Quality. The visible flaring was expected to occur from 8 am through Sun-day, the notification stated. Chevron Phillips' Olefins Unit 22 at Sweeny, TX and Eastman's HCC-3 unit at Longview, TX remained shut.

PGP SPOT PRICES

($/lb) Friday 1-Week Δ 1-Month Δ

Feb Mt B-EPC (TX) 0.33750 -0.00750 -0.04250

Mar Mt B-EPC (TX) 0.34250 -0.00750 -0.04250

PGP TRADING RANGES

($/lb) LOW HIGH MIDPOINT

Current Week Mt B-EPC 0.34500 0.34500 0.34500

Current Week ALL TX 0.34500 0.34500 0.34500

30-Day MtB-EPC 0.34500 0.37750 0.34500

30-Day All TX 0.34500 0.37750 0.34500

45-Day MtB-EPC 0.34500 0.38000 0.36250

45-Day All TX 0.34500 0.38000 0.36250

PGP WEIGHTED SPOT AVERAGES

($/lb) MTD avg 1-Month Δ 1-Year Δ

30-Day MtB-EPC 0.36279 -0.01263 -0.11346

30-Day All TX 0.36279 -0.01263 -0.11346

45-Day MtB-EPC 0.36848 -0.00694 -0.22069

45-Day All TX 0.36848 -0.00694 -0.22069

PGP CALENDAR SPOT AVERAGE

($/lb) MTD avg 1-Month Δ 1-Year Δ

Feb 0.35795 -0.01586 -0.11343

PGP MONTHLY CONTRACT PRICE

($/lb) CP 1-Month Δ 1-Year Δ

Jan 0.40000 -0.02000 -0.19000

Feb NA NA NA PCW In-Depth Weekly Reports

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Propylene Weekly

February 15, 2019 | Volume 3: Issue 7

Customer Service | Sales | Editorial www.petrochemwire.com | © 2018—PetroChem Wire Page 2

FEBRUARY 11-15, 2019 PRICE SUMMARY

RGP SPOT PRICE SUMMARY

Spot RGP prices were unchanged this week and no new Feb trades were confirmed. Feb spent the week at 24.5 cpp, which is where it last traded the previous Friday. The only trade confirmed this week was a Mar rail deal on Friday at 32 cpp for delivery in Texas.

The MTD 30-day weighted average for Feb pipeline RGP was 25.55 cpp, compared with 25.714 cpp in Jan. The Feb average for all-TX RGP for all transport modes was 25.55 cpp, compared with 26.799 cpp in Jan. The MTD 45-day weighted average for Feb MtB-EPC pipeline RGP was 25.722 cpp, com-pared with 25.2 cpp in Jan. The 45-day weighted average for Feb all-TX RGP by all transport modes was 25.973 cpp, compared with 26.15 cpp in Jan.

REFINERY OPERATIONS SUMMARY

The Wood River refinery in Roxana, IL was hit by an explosion and fire last Sunday during an attempt-ed restart of a crude distillation tower. The rest of the refinery was operational. The plant is jointly owned by Phillips 66 and Cenovus Energy. ExxonMobil shut the second largest crude distillation unit at its Baton Rouge, LA refinery on Tuesday for a turnaround. The overhaul of a separate CDU and a coker are set to begin later this month, and will last two months. The fluid catalytic cracker at the 190,000 b/d PBF Chalmette, LA refinery was shut early Tuesday, for unplanned maintenance. Shell restarted a hydrocracker at its Deer Park, TX refinery on Wednesday. It was shut on Feb 6, along with a catalytic reformer. Phillips 66 shut a fluid catalytic cracker at its Bayway, NJ refinery this week. De-tails including a restart timeframe were not disclosed.

Overall refinery operating rates were 85.9% for the week that ended Feb 8, down from 90.7% the pre-vious week, according to the EIA. US Gulf refinery throughput fell 2.4 percentage points to 88.5% of capacity, which is slightly above the five-year average for this time of year.

EIA STOCKS

US nonfuel use propylene inventories grew to a record high 6.135 million bbls for the week that ended Feb 8, up 383,000 bbls (6.7%) from the prior week, the EIA reported. Propylene inventories have grown in ten of the past twelve weeks and now stand 2.770 million bbls (82.3%) above the 52-week average of 3.365 million bbls.

DOWNSTREAM & ASSOCIATED MARKETS

The average implied (formula) price of cumene averaged 29.252 cpp so far this month, compared with an average of 27.855 cpp in Jan. RGP’s alkylation value averaged 34.658 cpp, compared with an av-erage of 31.775 cpp in Jan.

PGP's premium to RGP narrowed from 10 cpp to 9.25 cpp and splitter economics were still attractive. Propane prices averaged 65.301 cpg (15.43 cpp) so far this month, compared with 66.149 cpg (15.63 cpp) in Jan, keeping PDH economics very favorable. Ethylene prices were 18.5 cpp below PGP, keep-ing economics for running metathesis units attractive. For PCW's methodology on its assessments

and weighted monthly average calculations, click HERE

FEB SPOT RGP & ALKY VALUE ($/lb) Friday 1-Week Δ 1-Month Δ

RGP Mont Belvieu-EPC 0.24500 0.00000 -0.01214

RGP Implied Alky Value 0.37844 0.02013 0.12644

RGP TRADING RANGES ($/lb) LOW HIGH MIDPOINT

Current Week Mt B NA NA NA

Current Week All TX NA NA NA

Current TX/Non-TX NA NA NA

30-Day MtB-E pipe 0.24500 0.26500 0.25500

30-Day TX all 0.24500 0.26500 0.24500

30-Day TX/Non-TX all 0.24500 0.26500 0.24500

45-Day MtB-E pipe 0.24500 0.26500 0.25500

45-Day TX all 0.24500 0.31000 0.27750

45-Day TX/Non-TX all 0.24500 0.31000 0.27750

RGP WEIGHTED SPOT AVERAGES ($/lb) MTD avg 1-Month Δ 1-Year Δ

30-Day MtB-E pipe 0.25550 -0.00164 -0.04850

30-Day MtB-E all 0.25550 -0.00164 -0.04850

30-Day TX all 0.25550 -0.01249 -0.04850

30-Day TX/Non-TX all 0.25550 -0.01249 -0.04850

45-Day MtB-E pipe 0.25722 -0.01077 -0.04678

45-Day MtB-E all 0.25722 0.00522 -0.06278

45-Day TX all 0.25973 -0.00177 -0.06027

45-Day TX/Non-TX all 0.25973 -0.00177 -0.06027

RGP CALENDAR SPOT AVERAGE ($/lb) MTD avg 1-Month Δ 1-Year Δ

Feb 0.25409 -0.00305 -0.04722

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Propylene Weekly

February 15, 2019 | Volume 3: Issue 7

Customer Service | Sales | Editorial www.petrochemwire.com | © 2018—PetroChem Wire Page 3

FORWARD MARKETS AND SPOT DEAL GRIDS

For PetroChem Wire’s methodology on

daily propylene assessments and forward curves,

visit www.petrochemwire.com or click HERE

SPOT PGP $/lb

Feb-19 0.33750

Mar-19 0.34250

Apr-19 0.34750

May-19 0.35250

Jun-19 0.35750

Jul-19 0.36000

Aug-19 0.36125

Sep-19 0.36250

Oct-19 0.36625

Nov-19 0.36875

Dec-19 0.37625

Jan-20 0.38125

Feb-20 0.38625

Mar-20 0.39125

Apr-20 0.39875

May-20 0.40625

Jun-20 0.41375

Jul-20 0.40625

Aug-20 0.39875

Sep-20 0.39125

Oct-20 0.39125

Nov-20 0.39125

Dec-20 0.39125

Jan-21 0.39125

Feb-21 0.39125

PGP DEALS 15-Feb 14-Feb 13-Feb 12-Feb 11-Feb

February Physical .345 MtB-E .345 MtB-E

Spreads Physical .005 ctg Feb/

.005 ctg Feb/

Index Physical -.03 Mar CP

All Paper .36125 2Q

.36125 2Q

.36125 2Q

.39 2H

.39 2H

.3975 Jan

RGP DEALS 15-Feb 14-Feb 13-Feb 12-Feb 11-Feb

February Physical

Mar Physical .32 TX-O*

Spreads Physical

Index physical

PGP Spot Volumes (MM lbs) RGP Spot Volumes (K bbl)

MTD Feb Jan MTD Feb Jan

Current Month phys 30d 26 36 Current Month Pipe 30d 125 175

Current Month phys 45d 41 36 Current Month Pipe 45d 225 250

Next Month Pipe 45d 0 15 Next Month Pipe 45d 0 100

Forward phys 0 0 Forward phys 35 17.5

Spreads phys 29 35 Current Month All 30d 125.0 248.5

Index phys 19 44 Current Month All 45d 239.0 323.5

All paper 91.3 149 Next Month All 45d 0 114

Index 0 25

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Propylene Weekly

February 15, 2019 | Volume 3: Issue 7

Customer Service | Sales | Editorial www.petrochemwire.com | © 2018—PetroChem Wire Page 4

OPERATIONS SUMMARY

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Propylene Weekly

February 15, 2019 | Volume 3: Issue 7

Customer Service | Sales | Editorial www.petrochemwire.com | © 2018—PetroChem Wire Page 5

INTERNATIONAL SNAPSHOT

*European and Asian prices and commentaries are courtesy of Tecnon OrbiChem.

EUROPE*

European propylene prices came under pressure this week as downstream outages added length to the market. PGP prices were reported at an 8% discount to the monthly contract price, an equivalent of €851/mt ($961/mt or 43.6 cpp). A Feb delivery deal was concluded at this level during the week. Discounts for CGP were pegged at 6-10% below the monthly contract price, an equivalent of €832.50-869.50/mt ($940-982/mt or 42.7-44.5 cpp). Feb deals were reported at 6% below the contract price, delivery basis FCA Med and also CIF NWE, and at a 10% discount to the contract price on an FD NWE basis. A Mar deal was done at a discount of 5.5% to the Mar contract price, basis FD NWE.

In operations news, LyondellBasell’s Wesseling, Germany cracker continued ramping up operting rates. The Eni Versalis facility at Priolo, Italy remained shut from a Jan 10 fire at the site. The olefins unit was expected to restart in mid-Feb and shut again in mid-Mar for maintenance. A heavy mainte-nance season is expected to support steady imports to the region. BASF's cracker at Antwerp, Bel-gium, is scheduled to shut from early May into Jun, Shell's cracker at Moerdijk, the Netherlands is scheduled to shut from late Apr for 60 days. Dow’s cracker at Boehlen, Germany will also be offline during this period. Between Aug and Nov, the following units are scheduled to shut for 6-8 weeks: INEOS at Grangemouth, UK; Dow at Terneuzen, Germany; Repsol at Tarragona, Spain; SABIC at Geleen, the Netherlands; BASF at Ludwigshafen, Germany; and BPRP at Gelsenkirchen, Germany.

ASIA*

East Asian propylene prices were mixed this week as the market returned from the Lunar New Year holiday. The FOB Korea price was up $10/mt at $920/mt (41.7 cpp), while the CFR China price was down $5/mt at $945/mt (42.9 cpp). The Chinese domestic propylene average spot price was down Rmb350/mt at Rmb7300/mt ($1078/mt or 48.9 cpp) ex-works.

Upstream, naphtha prices ended the week at $475/mt, compared with $490/mt the previous Friday. Downstream, East China PP raffia spot prices were averaging Rmb8875/mt ($1044/mt or 47.3 cpp) ex-warehouse, down Rmb300/mt from late Jan. HoPP raffia imports to Southeast Asia were down $10/mt at $1085/mt (49.2 cpp).

In operations news, Zhejiang Satellite Petrochemical in Pinghu City, Zhejiang, China announced that the second phase of its expansion, a 450,000 mt/yr PDH plant, has achieved 100% operating rates by Feb 13. The project's first phase was the startup of a different 450,000 mt/yr PDH plant.

Lotte Chemical's olefins unit in Yeosu, South Korea was shut due to an electricity supply problem last week. Its propylene capacity is 900,000 mt/yr. Keiyo Ethylene's olefins plant in Chiba, Japan shut for maintenance last week. Its propylene capacity is 400,000 mt/yr.

GLOBAL INDICATORS*

SPOT 1-Week Δ

$/MT $/LB $/MT $/LB

PGP FD NW Europe 961 0.43591 -71 -0.03221

PGP FOB Korea 925 0.41958 10 0.00454

PGP FOB Mt Belvieu 744 0.33750 -17 -0.00750

FEEDSTOCK INDICATORS* $/MT $/LB

Naphtha FD Europe 475.00 0.21546 Naphtha CFR Japan 507.50 0.23020 Propane USG 357.99 0.16238

FREIGHT RATES $/MT $/LB

USG-EUROPE 150-160 0.068-0.073 USG-ASIA 250-300 0.113-0.136 BRAZIL-USG 150-160 0.068-0.073 BRAZIL-ASIA 290-300 0.132-0.136

BRAZIL-EUROPE 165-185 0.075-0.084

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Propylene Weekly

February 15, 2019 | Volume 3: Issue 7

Customer Service | Sales | Editorial www.petrochemwire.com | © 2018—PetroChem Wire Page 6

CUMENE (FORMULA PRICE) For an in-depth look at cumene economics, click here for the PCW Daily Refinery Focus

POLYPROPYLENE For an in-depth look at US prime grade PP, click here for the PCW PP Weekly Report

DOWNSTREAM MARKETS SNAPSHOT

RECYCLED POLYPROPYLENE For an in-depth look at US recycled PP, click here for the PCW Recycled Plastics Report

RGP ALKY VALUE For an in-depth look at gasoline blendstock economics, click here for the PCW Daily Refinery Focus