Propane prices saw flat-to-higher trade featuring a narrowing of the north-south spread on Thursday, reflecting a narrowing of the Brent-WTI spread. Brent crude futures edged up 0.4%, while WTI futures climbed 1.0% higher amid strength in US equities following encouraging US economic data releases. Mt. Belvieu TET propane prices held steady at 49.63c/g, while Conway spot prices climbed 1.1% (50 points) higher to 45.75c/g, cutting their discount to Mt. Belvieu back to under four cents.
Crude futures were slipping this morning, with WTI and Brent crude futures both off about 0.6% as of this writing. Benchmark propane prices were moving in the opposite direction, with Mt Belvieu TET adding 0.3% (12 points) to trade at 49.75c/g (non-TET close by at 49.81c/g), and with Conway spots gaining 0.8% (38 points) to hit 46.13c/g. NYMEX natural gas futures were no source of support, as they were falling back 1.8% after a sharp two-session rally. OPIS reports that there are delays in starting up propane dehydrogenation plants in China, which then delay the timeframe for an expected increase in demand. Two new PDH units were expected to come online next quarter, and now only one of them looks likely - in Yantai by Wanhua Chemical. Nevertheless, this would still increase propane demand by about 2.2 million metric tons per year, according to IHS Markit estimates.
Have a wonderful weekend!
