Posted on by Curtis Chandler Posted in Railcar Report

“What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.”
 —Dave Thomas

Jobs Update

  • Initial jobless claims seasonally adjusted for the week ending December 30th, 2023 came in at 202,000, down -18,000 people week-over-week.
  • Continuing jobless claims came in at 1.855 million people, versus the adjusted number of 1.886 million people from the week prior, down -31,000 people week-over-week.

Stocks closed higher on Friday of last week, but lower week over week

The DOW closed higher on Friday of last week, up 25.77 points (0.07%), closing out the week at 37,466.11, down -223.43 points week-over-week. The S&P 500 closed higher on Friday of last week, up 8.56 points (0.18%), and closed out the week at 4,697.24, down -72.59 points week-over-week. The NASDAQ closed higher on Friday of last week, up 13.77 points (0.09%), and closed out the week at 14,524.07, down -487.28 points week-over-week.

In overnight trading, DOW futures traded lower and are expected to open at 37,536 this morning, down -183 points.

Crude oil closed higher on Friday of last week and up week over week

WTI traded up $1.62 per barrel (2.24%) to close at $73.81 per barrel on Friday of last week, up $2.16 per barrel week-over-week. Brent traded up US$1.17 per barrel (1.51%) on Friday of last week, to close at US$78.76 per barrel, up US$1.72 per barrel week-over-week.

One Exchange (link) WCS for February delivery settled on Friday of last week at US$19.25 below the WTI-CMA. The implied value was US$54.61 per barrel. On Thursday of last week, it settled at US$19.00 below the WTI-CMA for February delivery. The implied value was US$53.40 per barrel.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 6.9 million barrels week-over-week. At 436.6 million barrels, U.S. crude oil inventories are 1% below the five-year average for this time of year.

Total motor gasoline inventories increased by 10.9 million barrels week-over-week and are slightly above the five-year average for this time of year.

Distillate fuel inventories increased by 10.1 million barrels week-over-week and are 6% below the five-year average for this time of year.

Propane/propylene inventories decreased by 2.0 million barrels week-over-week and are 13% above the five-year average for this time of year.

Propane prices closed at 69 cents per gallon, up 1 cent week-over-week, but down 1 cent year-over-year.

Overall, total commercial petroleum inventories increased by 6.9 million barrels during the week ending December 29th, 2023.

U.S. crude oil imports averaged 6.9 million barrels per day week over week during the week ending December 29th, 2023, an increase of 619,000 barrels per day week-over-week. Over the past four weeks, crude oil imports averaged 6.6 million barrels per day, 7.0% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 659,000 barrels per day, and distillate fuel imports averaged 194,000 barrels per day during the week ending December 29th, 2023.

U.S. crude oil exports averaged 5.292 million barrels per day for the week ending December 29th, an increase of 1.377 million barrels per day week-over-week. Over the past four weeks, crude oil exports averaged 4.275 million barrels per day.

U.S. crude oil refinery inputs averaged 16.7 million barrels per day during the week ending December 29, 2023, which was 121,000 barrels per day more week-over-week.

WTI is poised to open at 71.84, down -1.97 per barrel from Friday’s close

North American Rail Traffic

Week Ending January 3rd, 2023.

Total North American weekly rail volumes were up (2.52%) in week 1, compared with the same week last year. Total carloads for the week ending on January 3rd were 290062, up (4.76%) compared with the same week in 2023, while weekly intermodal volume was 239,965, down (-0.07%) compared to the same week in 2023. 6 of the AAR’s 11 major traffic categories posted year over year increases with the most significant increase from Chemicals (+20.07%) while the largest decrease came from Motor Vehicles and Parts, down (-9.86%).

In the East, CSX’s total volumes were down (-0.59%), with the largest increase coming from Metallic Ores and Minerals (+20.41%) and largest decrease coming from Coal, down (-23.85%). NS’s volumes were down (-3.1%), with the largest increase coming from Chemicals (+11.46%) while the largest decrease came from Grain, down (-33.34%).

In the West, BN’s total volumes were up (+8.97%), with the largest increase coming from Chemicals (+25.58%) while the largest decrease came from Metallic Ores and Minerals, down (-2.17%). UP’s total rail volumes were up (+5.75%) with the largest increase coming from Petroleum and Petroleum Products (+32.49%) while the largest decrease came from Other, down (-21.86%).

In Canada, CN’s total rail volumes were down (3.38%) with the largest increase coming from Nonmetallic Minerals (+24.39%) and the largest decrease coming from Grain (-64.46%). CP’s total rail volumes were up (18.54%) with the largest increase coming from Coal (+166.13%) while the largest decrease came from Other, down (-38.24%).

KCS’s total rail volumes were down (-10.63%) with the largest decrease coming from Intermodal (-33.95%) and the largest increase coming from Metallic Ores and Metals (+38.08%).

Source Data: AAR – PFL Analytics

Rig Count

North American rig count was up by 38 rigs week-over-week. U.S. rig count was down by -1 rig week-over-week, and down by -151 rigs year-over-year. The U.S. currently has 621 active rigs. Canada’s rig count was up by 39 rigs week-over-week , but down by -64 rigs year-over-year.  Canada’s overall rig count is 125 active rigs. Overall, year-over-year, we are down -215 rigs collectively.

International rig count which is reported monthly was down by -23 rigs month-over-month, but up by 55 rigs year-over-year. Internationally there are 955 active rigs.

North American Rig Count Summary

A few things we are watching:

We Continued to Watch Trans Mountain Pipeline Expansion. 

The Canadian Government’s 300,000 barrel per day oil pipeline apportionment hit a 2 week high last month where it rejected 24% of crude oil nominations for the month of January.  The was the highest apportionment in two years and up 4% month over month.  January 2024 marks the eighth consecutive month of apportionment on the pipeline.

The reason is rising Canadian production looking for a home.  Trans Mountain Links Edmonton, Alberta crude producers with west coast refiners in Washington and British Columbia.

In the latest the 598,000 barrel per day expansion is expected to be operational in the second quarter of 2024.  The total capacity will then be 890,000 barrels per day.  Continued construction traction delays from environmental and indigenous groups have raised havoc on the project.

Source : TMP – PFL Analytics

We are watching Ethane and PetroChemical Production

Ethane supply is expected to rise as recovery of the commodity from natural gas processing plants and reduced demand from petrochemical demand continues to be weaker than expected.  Ethane recovery levels reached maximum recovers in Q42020.  Mont Belvieu Texas ethane prices have averaged 37.75 cents per gallon in the Q42023 (Natural gas equivalent 19.39 cents per gallon.  Rejection levels have averaged 50,000 to 75,000 barrels per day.

The EIA estimated that Ethane production will average 2.6 million barrels per day in 2023 as natural gas production continued to increase leaving more extraction available. The EIA indicated previously that demand would increase due to three new petrochemical plants coming on line the problem is demand for the feedstock has been lackluster and the spread at Henry Hub (Natural Gas) has dropped to $1.20 per gallon.  All associated Natural Gas by products have dropped in price and inventories are above their five-year average.  Take a look at natural gas below:

Most U.S. Ethylene crackers are configured to use Ethane because it is cost efficient, but those crack spreads have turned and gone negative in some circumstances and plants continue to operate at reduced levels.

We are Watching Renewables

A  new year  and another holiday shortened trading week last week did not change the recent downward trajectory for Ethanol. For the most part, Ethanol has prevailed since Thanksgiving, although spot interest and prices did find some footing after sagging to some of the lowest values since early 2021. Spot Ethanol bulk transfers at the Argo facility near Chicago for the first half of January entered the New Year trading at less than $1.52/gal, levels not seen since the first week of January 2021 and traded just short of a three-year low. Ethanol prices did regain some footing in the back half of last week – closing at $1.525 on Wednesday of last week and on Thursday closing at $1.55 we are still down 25 cents, or roughly 14%, since the start of December 2023.  Ethanol at Argo closed out the day and the week at $1.59 per gallon, up 4 cents per gallon day over day but flat week over week.

RINS and LCFS credits continue to trade at or near their lows.   D6 RINS closed at 79 and ½ of a cent per RIN, up one cent per RIN day over day, and up 1 cent per RIN week over week.  LCFS credits in California closed out the day the week and the year at $68.50 per MT, flat day over day, but up $2 per MT week over week.

We are Watching Shipping Lanes

As attacks in the Red Sea persist, freight rates for key flows via the region have surged, but remain unaffected on a global scale. Tanker diversions have picked up in the span of the last two weeks, but these are not occurring en-masse as tankers and volumes continue to flow via the Red Sea. Instead, these diversions are at large constrained to US/EU/Israel-linked entities and also the companies that announced the decision to divert via the Cape of Good Hope.

Tensions in the Red Sea started mounting at the start of 2024 as attacks from the Houthi rebels continue to occur. Several companies in the shipping world – at least 18 of them have decided to steer clear from the Red Sea, with containerships feeling the greatest impact with freight rates tripling over the last month to hit 12-month highs.

On the other side of the world, drought conditions in the Panama Canal, worsened and has severely impacted container ship traffic through yet another key trade route. October 2023 marked the driest October on record for the Canal watershed, according to the Panama Canal Authority, and officials have cut the number of transits through the critical shipping artery.

How this all relates to rail is unknown, as supply receipt points seem to be constantly changing.  It is going to have the greatest impact on an already battered U.S. consumer where these increased costs will untimely be paid by them – they just don’t know it yet. 

We have been extremely busy at PFL with return-on-lease programs involving rail car storage instead of returning cars to a shop.  A quick turnaround is what we all want and need.   Railcar storage in general has been extremely active.  Please call PFL now at 239-390-2885 if you are looking for rail car storage, want to troubleshoot a return on lease scenario, or have storage availability.  Whether you are a car owner, lessor or lessee, or even a class 1 that wants to help out a customer we are here to “help you help your customer!”

Leasing and Subleasing has been brisk as economic activity picks up. Inquiries have continued to be brisk and strong Call PFL Today for all your rail car needs at 239-390-2885

Lease Bids

  • 10, 5200cf PD Hoppers needed off of UP in Colorado for 1-3 years. Cars are needed for use in Silica service. Call for details
  • 25-50, 5000CF-5100CF Covered Hoppers needed off of BNSF, CSX, KCS, UP in Gulf LA for 3-10 years. Cars are needed for use in Dry sugar service. 3 bay gravity dump, Hempel 37700
  • 50-100, 4550 Covered Hoppers needed off of UP or BN in Texas for 5 years. Cars are needed for use in Grain service.
  • 10, 2500CF Open Top Hoppers needed off of UP or BN in Texas for 5 years. Cars are needed for use in aggregate service. Need Rapid Discharge Doors
  • 25, 3230 PD Hoppers needed off of NS or CSX in Ohio for 5 years. Cars are needed for use in Flyash service.
  • 10, 33K 340W Pressure Tanks needed off of CN in LA for 1 year. Cars are needed for use in Butane service.
  • 25-50, 32K 340W Pressure Tanks needed off of NS or CSX in Marcellus for 1-2 years. Cars are needed for use in Propane service. Q1
  • 14, 23.5K DOT111 Tanks needed off of UP in Morrilton, AR for 1 year. Cars are needed for use in Turpentine service.
  • 50, 19k DOT111 Tanks needed off of UP or BN in Nevada or CA for 1 year. Cars are needed for use in Sulfuric Acid service. March or April
  • 10, 30k any Tanks needed off of UP BN in Texas for 1 year plus. Cars are needed for use in Fuel Oil service.
  • 25-50, 30K DOT111, DOT117, CPC 1232 Tanks needed off of CN or CP in WI, Sarnia for 1-2 years. Cars are needed for use in Diesel service. Q2-Q3
  • 108, 28.3K Any Tanks needed off of CN in Canada for 1-3 years. Cars are needed for use in Crude service.
  • 10, 28.3K DOT 111, 117, CPC 1232 Tanks needed off of UP or BN in Iowa for 2 years. Cars are needed for use in Biodiesel service.
  • 150, 23.5K DOT111 Tanks needed off of any class 1 in LA for 2-3 years. Cars are needed for use in Fluid service. Needed July
  • 30-40, 28.3K DOT117R, DOT117J, DOT111 Tanks needed off of UP in Iowa for 2-3 years. Cars are needed for use in Feedstocks service.
  • 15, 28.3K DOT117J Tanks needed off of any class 1 in any location for 3 years. Cars are needed for use in Glycerin & Palm Oil service.
  • 30, 17K-20K DOT117J Tanks needed off of UP or BN in Midwest/West Coast for 3-5 years. Cars are needed for use in Caustic service.
  • 25, 20.5K CPC1232 or DOT117J Tanks needed off of BNSF or UP in the west for 3-5 years. Cars are needed for use in Magnesium chloride service. SDS onhand
  • 25-50, 25.5K DOT117J Tanks needed off of NS CSX in Northeast for 5 years. Cars are needed for use in Asphalt / Heavy Fuel Oil service.
  • 100, 28.3K Any Tanks needed off of UP or BN in Midwest/Texas for 5 years. Cars are needed for use in Veg Oils / Biodiesel service. Need to be Unlined
  • 20-25, 30K DOT117 Tanks needed off of UP or BN in Illinois for 5 years. Cars are needed for use in Ethanol service.
  • 8, 28-30K Any Tanks needed off of UP BN in Texas and Gulf for 5 years. Cars are needed for use in Chlorobenzene service. Need Magrods
  • 25, 30K Any Tanks needed off of in Houston for December -June. Cars are needed for use in Diesel service.
  • 75, 30K Any Tanks needed off of Any Class 1 in Chicago for December 23-May 24. Cars are needed for use in Gasoline service.
  • 50, 23.5-25.5 DOT111 Tank s needed off of Any Class 1 in USA for 5 years. Cars are needed for use in Asphalt service.
  • 10, 30K 117R or 117J Tanks needed off of Any Class 1 in USA for 1 year. Cars are needed for use in Glycerin service.

Sales Bids

  • 100, Plate F Boxcars needed off of BN or UP in Texas.
  • 10, 2770 Mill Gondolas needed off of any class 1 in St. Louis. Cars are needed for use in Cement service.
  • 20, 2770-3400 Mill Gondolas needed off of any class 1 in South Texas. Cars are needed for use in scrap metal service.
  • 20, 2770 Mill Gondolas needed off of CSX in the northeast. Cars are needed for use in non-haz soil service. 52-60 ft
  • 100-150, 3400CF Covered Hoppers needed off of UP BN in Texas. Cars are needed for use in Sand service.
  • 8, 5200 Covered Hoppers needed off of various class 1s in various locations. Cars are needed for use in Plastic Pellet service.
  • 20-30, 3000 – 3300 PDs Hoppers needed off of BN or UP preferred in West. Cars are needed for use in Cement service. C612
  • 10, 4000 Open Hoppers needed off of CSX in the northeast. Cars are needed for use in scrap metal service. Open top hopper
  • 10, 6400 Open Hoppers needed off of CSX in the northeast. Cars are needed for use in wood chip service. Open top hopper, flat bottom
  • 45, 3000 cf PD Hoppers needed off of any class 1 in Texas. Negotiable
  • 200+, 5000cf Covered Hoppers needed off of any class 1 in various locations.
  • 5, 3400CF Closed Hoppers needed off of any class 1 in Ohio. Cars are needed for use in Sand service.
  • 20, 17K DOT111 Tanks needed off of various class 1s in various locations. Cars are needed for use in corn syrup service.
  • 100, 15.7K DOT111 Tanks needed off of CSX or NS in the east. Cars are needed for use in Molten Sulfur service.
  • 30, 17K-20K DOT111 Tanks needed off of UP or BN in Texas. Cars are needed for use in UAN service.
  • 20-25, 25.5K DOT117, DOT111, CPC 1232 Tanks needed off of UP or BN in Texas. Cars are needed for use in Veg Oil service. Coiled and insulated
  • 15, 30K DOT117, DOT111, CPC 1232 Tanks needed off of UP or BN in Texas. Cars are needed for use in Veg Oil service.
  • 1-2, Any DOT117, DOT111, CPC 1232 Tanks needed off of any class 1 in Texas. Coiled and Insulated
  • 2-4, 28K DOT111 Tanks needed off of BNSF Preferred in Minnesota. Cars are needed for use in Biodiesel service. Coiled and insulated

Lease Offers

  • 15, Plate E and F Boxs located off of NS in New Orleans. Cars are clean Double Sliding Doors
  • 10, 28.3K, DOT117R Tanks located off of All Class Ones in St Louis. Cars are clean Call 239-390-2885 for more information
  • 10, 21.9K, Tanks located off of UP in Longview, TX. Cars are clean CO2 Cars. Brand New. 2-5 Year Lease
  • 38, 4750 plus, 3-4 Hatch Gravity Covered Hopperss located off of CSX CN CP in Florida. Sub-lease 12-18 months
  • 125, 28.3K, 117J Tanks located off of Various Class 1s in Multiple locations. Cars are clean Long Term Lease, 5 Years +
  • 80, 25.5K, 117J Tanks located off of UP in Texas. Cars are clean Long-term Lease.

Sales Offers

  • 20, Refer, Box Boxcars located off of UP in ID.
  • 100-200, 31.8K, CPC1232 Tanks located off of BN in Chicago. Mix of dirty and clean cars
  • 100, 28.3K, DOT117J Tanks located off of various class 1s in multiple locations.
  • 100, 17K, DOT111 Tanks located off of various class 1s in multiple locations.
  • 100, 19K, DOT111 Tanks located off of various class 1s in multiple locations.
  • 120, 31.8K, CPC1232 Tanks located off of various class 1s in multiple locations.
  • 300-500, 3250s, Covered Hoppers located off of various class 1s in multiple locations.
  • 140, 60ft, Boxcars located off of various class 1s in multiple locations.
  • 150, 29.2K, DOT117R Tanks located off of various class 1s in multiple locations.
  • 100-300, 3400, Covered Hoppers located off of various class 1s in multiple locations.

Call PFL today to discuss your needs and our availability and market reach. Whether you are looking to lease cars, lease out cars, buy cars, or sell cars call PFL today at 239-390-2885

PFL offers turn-key solutions to maximize your profitability. Our goal is to provide a win/win scenario for all and we can handle virtually all of your railcar needs. Whether it’s loaded storage, empty storage, subleasing or leasing excess cars, filling orders for cars wanted, mobile railcar cleaning, blasting, mobile railcar repair, or scrapping at strategic partner sites, PFL will do its best to assist you. PFL also assists fleets and lessors with leases and sales and offers Total Fleet Evaluation Services. We will analyze your current leases, storage, and company objectives to draw up a plan of action. We will save Lessor and Lessee the headache and aggravation of navigating through this rapidly changing landscape.

PFL IS READY TO CLEAN CARS TODAY ON A MOBILE BASIS WE ARE CURRENTLY IN EAST TEXAS

Live Railcar Markets

Lease Offers
Lease Bids
Sales Offers
Sales Bids
CAT Type Capacity GRL QTY LOC Class Prev. Use Clean Offer Note