In this week’s Market Movers Americas with Ander Garcia:
- Red Sea attacks add pressure to canal complications
- NYMEX WTI moves deep into contango
- Aluminum producer discusses 45X tax credit
- Propylene continues bullish trend
- Texas grid operator to raise fee
This week, market upheaval is unfolding as geopolitical tensions are forcing carriers to suspend services in the Red Sea. The unpredictability of the Suez Canal and Panama Canal is escalating, and shippers are having to contemplate the Cape of Good Hope as an alternative, despite its significantly longer transit time.
In metals, Century Aluminum will host an investor call to discuss the impact of the Treasury Department's recent guidance on the 45X Advanced Manufacturing Production Credit. The company is expected to outline how the tax credits will support its US aluminum smelting operations.
In chemicals, the shutdown of Enterprise Products Partners' PDH unit is amplifying supply issues and driving up prices for polymer-grade propylene, making downstream polypropylene exports from the US uncompetitive globally. The unit is expected to restart in January, and PGP prices are expected to rise or stay at current levels this week, while polypropylene exports remain restricted.
In oil, concerns about demand and predictions of a global supply overhang in 2024 are overshadowing the NYMEX WTI curve. Timespreads have been pushed into deep contango, and the sixth-month contract most recently settled at its highest premium to the prompt month in two years.
Finally, the Electric Reliability Council of Texas is mulling an increase in its system administration fee. The board of directors is considering raising it from 55 cents/MWh to 63 cents/MWh, and market participants are waiting to learn the cost implications for them.
I’m Ander Garcia. Thanks for kicking off your Monday with S&P Global Commodity Insights.