Platts: Petrochemical Prices Slip 2% in November on Weakened Demand

LONDON, Dec. 6, 2012 /PRNewswire/ -- Prices in the $3-trillion-plus global petrochemicals market fell 2% to $1,323 per metric ton (/mt) in November, according to the just-released monthly average of the Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals. This follows a drop of less than one percent in October to an average price of $1,351/mt.

But on a year-over-year basis, petrochemical prices were up 14% from the November 2011 average price of $1,162/mt, according to data published by Platts, a leading global energy, petrochemicals and metals information provider and a top source of benchmark price references.  

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

PLATTS GLOBAL PETROCHEMICAL INDEX IN DOLLARS PER METRIC TON
The daily price reflected as a monthly average

"November petrochemical prices moved almost lock step with global oil prices," said Jim Foster, Platts senior editor of petrochemical analytics. "Crude oil was dominating many other petrochemical-specific supply and demand factors during the month."

The average price of Dated Brent crude oil in November was $109.25 per barrel (/b), marking a 2% drop from the October average of $111.75/b. The Platts Global Naphtha Index slipped by the same percentage in November to $628/mt from the October level of $639.75.  

In particular, naphtha weighed on the November prices of ethylene, used in textiles and polyvinyl chloride (PVC), which is widely used in construction for window frames, water pipes, garden furniture and packaging. The Platts Global Ethylene Index fell 7% to $1,252/mt in November, the largest drop of the seven PGPI components. Low-density polyethylene, which is a polymer produced from ethylene, fell 4% in November to $1,424/mt. Polypropylene, another polymer component in the PGPI, fell 2% to $1,435/mt in November. Polypropylene is used in reusable containers and automotive components, electric equipment, ropes, carpets and textiles.

Aromatic petrochemical prices were mostly higher in November, with the largest increase in the global benzene market. Benzene is the key ingredient to styrene, used in packaging, various plastics, nylon and other textiles. The benzene index climbed 5% on tight supply conditions to an average $1,398/mt in November, up from $1,331/mt in October.

"For the second straight month it has been benzene prices, as a share of the overall PGPI, which have been able to offset the lion's share of the losses in the olefins and polyolefins," Foster said. "There continues to be less benzene available globally due to refiners' shift from naphtha to ethane in steam crackers. This is keeping upward pressure on benzene prices."

Also higher in November were global prices of paraxylene (PX), used in fibers and polyethylene terephthalate (PET) for plastic bottles. The Platts PX index rose less than one percent to an average of $1,511/mt, versus the October level of $1,507/mt. Toluene, a petrochemical that can be used for gasoline blending or can be converted into benzene and paraxylene, averaged $1,275/mt in November, down 1% from the October average of $1,281/mt.

Petrochemical prices largely moved opposite to the direction of most global equity markets during November. The Nikkei 225 climbed 6% during November and the London Stock Exchange Index (FTSE) rose 1.5%. The Dow Jones Industrial Average (DJIA) was down 0.5% during November.

To access a summary of the November performance of each of the seven key petrochemicals included in the PGPI, visit this link: http://www.platts.com/newsfeature/2012/pgpi/index.

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. Used as a price reference, a gauge of sector activity, and a measure of comparison for determining the profitability of selling a barrel of crude oil intact or refining it into products, the PGPI was first published by Platts in August 2007.

Published daily in a real-time news service Platts Petrochemical Alert 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. 

Platts petrochemicals experts are available for media interviews. A sample list of experts may be found at the Platts Media Center. For more information on petrochemicals, visit the Platts website at www.platts.com.

About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals and metals information and a premier source of benchmark prices for the physical and futures markets. Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency. Customers in more than 150 countries benefit from Platts' coverage of the carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, and shipping markets.  A division of The McGraw-Hill Companies (NYSE: MHP), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.

About The McGraw-Hill Companies: McGraw-Hill announced on September 12, 2011, its intention to separate into two companies: McGraw-Hill Financial, a leading provider of content and analytics to global financial markets, and McGraw-Hill Education, a leading education company focused on digital learning and education services worldwide. McGraw-Hill Financial's leading brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts energy information services and J.D. Power and Associates. With sales of $6.2 billion in 2011, the Corporation has approximately 23,000 employees across more than 280 offices in 40 countries. Additional information is available at http://www.mcgraw-hill.com/.

SOURCE Platts