Petrochemical prices in the US$3 trillion-plus global petrochemicals market climbed another four per cent month over month in May
Data released by the monthly Platts Global Petrochemical Index (PGPI) indicated the fourth consecutive month of increase following six consecutive months of falling prices. The prices, expressed as a monthly average, increased US$41 per metric tonne (MT) from April to US$1,093 per MT in May.
The PGPI is a benchmark basket of seven widely used petrochemicals. “Global petrochemical prices continue to climb, but remain well below last year’s prices. Since January, the prices have advanced 29 per cent, mostly because of stronger crude oil and naphtha prices. But on a year-over-year basis, May 2015 prices are down 20 per cent. In May 2014, the PGPI index was at US$1,361 per MT,” said Jim Foster, director of petrochemical analysis at Platts.
Crude oil prices were up eight per cent in May from April and naphtha prices were up six per cent. Olefins prices tend to track naphtha prices, given that naphtha is the most widely used cracker feedstock worldwide.
Olefins
Prices of olefins – a group of hydrocarbon compounds, which are the building blocks to many petrochemical products used to produce everyday goods – jumped two per cent to five per cent in May on the back of stronger naphtha prices. Ethylene prices gained five per cent in May from April to US$1,151 per MT and propylene prices were up two per cent to US$936 per MT.
Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, posted similar month-over-month price gains. Global polyethylene prices increased seven per cent to US$1,529 per MT, while polypropylene prices were up six per cent to US$1,444 per MT.
Aromatics
Prices of aromatics – a group of scented hydrocarbons with benzene rings used to make a variety of petrochemicals – were mixed last month. Benzene was the only component in the PGPI to post lower prices in May, falling five per cent to US$787 per metric tonne.
“Benzene prices were lower due to the substantial demand gap from downstream derivatives,” Foster said. “For example, at least 10 per cent of European styrene capacity – which totals more than 6.6mn MT per year – is estimated to be offline in June. Phenol production, the second-largest use of benzene after styrene, experienced planned and unplanned maintenance turnarounds at various plants, which had an impact on benzene demand,” he added.
Toluene and paraxylene, the two other aromatic PGPI components, saw stronger prices in May. Toluene was up seven per cent to US$778 per MT while paraxylene increased three per cent to US$888 per MT.
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.
