Global petrochemical prices rise in March after 6-month fall

Prices in the $3-trillion-plus global petrochemicals market climbed another 9 per cent month over month in March, for a second month of rebound following six consecutive months of falling prices.

Petrochemical prices, expressed as a monthly average, increased $81 per metric ton (/mt) from February to $954/mt in March, according to the just-released monthly Platts Global Petrochemical Index (PGPI).

The PGPI is a benchmark basket of seven widely used petrochemicals and is published by Platts, a leading global provider of energy, petrochemicals, metals and agriculture information and a top source of benchmark price references.

"Even though crude prices were down slightly on average in March, petrochemicals were still responding to the nearly 20 per cent increase in crude prices in February, and the 24 per cent increase in February naphtha prices," said Jim Foster, director of petrochemical analysis at Platts. "In February, petrochemicals only advanced 3%, but were able to post gains of nearly 10 per cent in March."

The chart above shows the daily end-of-day Platts Global Petrochemical Index (PGPI) price in red and also displays the 20-day PGPI moving average (MA) in blue. If you have trouble viewing the graphic, visit this link: PGPI Averages.

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

Prices of olefins -- a group of hydrocarbon compounds which are the building blocks to many petrochemical products used to produce everyday goods -- jumped approximately 10 per cent in March as the market reacted to February's strong naphtha prices. Ethylene prices gained 10 per cent in March from February to $922/mt and propylene prices were up 9 per cent to $933/mt.

Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, posted similar month-over-month price gains.

Global polyethylene prices climbed to $1,270/mt, up 9 per cent, while polypropylene prices were up 11 per cent to $1,284/mt.

Prices of aromatics -- a group of scented hydrocarbons with benzene rings used to make a variety of petrochemicals -- also saw increases in March.

Benzene saw the largest gain of any component in the PGPI, with prices climbing 15 per cent from February to $727/mt in March. Toluene prices rose 7 per ent to $690/mt, while paraxylene prices were flat at $788/mt.

Global equity markets were mixed in March. The London Stock Exchange Index (FTSE) posted a 2.5 per cent drop and the Dow Jones Industrial Average wasn't far behind, falling 2 per cent. However, the opposite was true of the NIKEEI 225, which was up 2 per cent last month.

A summary of the March performance of each of the seven key petrochemicals included in the PGPI is available upon request.

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.

Platts Global Petrochemical Index ($ / Mt)

March 2015
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