Platts Global Petrochemical Index (PGPI) Averaged $1,071/mt in August, Up 6.2%

LONDON, Sept. 15 /PRNewswire/ -- Platts – The monthly average price of petrochemicals, as  measured by the Platts Global Petrochemical Index (PGPI), a basket of seven widely-used petrochemicals expressed daily in dollars per metric ton ($/mt),  was $1,071/mt in August, or up 6.2% from July, according to Platts, a leading global energy and metals information provider.

The August average is up $62/mt from the July average of $1,009/mt, and 5.7% higher than the average in August 2009. The rise in the PGPI was attributed to an increase in economic activity in Asia as the manufacturing industry restocked inventories ahead of the year-end gift-giving holiday season.

Asia led the price rise on increased production of plastic and synthetic fibers for products and packaging being readied for the peak Christmas season. Price support also came from South Asia, where demand for plastics from flood-stricken Pakistan pushed up consumption of the polymer raw material.

"Pails, plates, cutlery and wrappings, they are all needed right now," a Pakistan trader said in an August 26 interview, pointing to the late-summer flood period which left the country devastated.

Petrochemicals, a $3 trillion global business, are used to make plastic, rubber, nylon, other consumer products and are utilized in manufacturing, construction, pharmaceuticals, aviation, electronics and nearly every commercial industry.

"Moving ahead into September, Asia petrochemical prices are expected to support, as manufacturing-centered countries such as China, India and Southeast Asia are deep into production for the Christmas season," said Quintella Koh, Platts Managing Editor of Asia Petrochemicals. "But beyond September, past the production peak period, spot markets might see a steep southward correction, especially if the U.S. pace of growth continues to trail."

Rapid price increases were seen in olefins, polymers and fiber intermediates prices in Asia as the region grappled with a short-term supply crunch and robust petrochemicals demand from the automobile and construction industries. Ethylene and naphtha cracking margins in Northeast and Southeast Asia entered positive territory for the first time in three months on August 26, Platts data showed.

In Europe, polymer prices moved lower in August on supply and price competition from the United States, Middle East and East Europe. Prices of benzene were higher in the United States, attracting interest from Asian manufacturers seeking improved profits.

PGPI levels were volatile in August with an average daily fluctuation of 2.26% from 1.25% a month earlier, reflecting financial market pessimism and continuing slow petrochemical demand growth. Prices, after hitting a 15-month high in mid April, had trended lower before finding support in July. For a full multi-year price history, view a graphic at this link.

The PGPI reflects a compilation of the daily price assessments of physical spot market ethylene, propylene, benzene, toluene, paraxylene, low density polyethylene (LDPE) and polypropylene as published by Platts and is weighted by the three regions of Asia, Europe and the United States. It is utilized as a price reference, a gauge of sector activity, and a measure of comparison for determining the profitability of selling a crude barrel intact or refining it into products.

First published by Platts in August 2007, the PGPI peaked at $1,679/mt on July 14, 2008 before plummeting to a low of $491/mt on December 5, 2008, on the heels of the global financial meltdown. Published daily in Platts Petrochemical Alert, a real-time news service, and other Platts publications, the PGPI is anchored by Platts' robust and long-established price assessment methodology and the firm's 100-year history of energy price reporting.  

For more information on petrochemicals, visit the Platts website at www.platts.com.   For Chinese-language information on petrochemicals and the energy and metals markets, visit http://www.platts.cn/. Platts petrochemicals experts are available for media interviews, consult Platts Media Center.

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SOURCE Platts