Platts: Global Petrochemical Prices Plunged 18% in December

SINGAPORE, Jan. 16, 2015 /PRNewswire/ -- Prices in the $3-trillion-plus global petrochemicals market fell another 18% in December – the biggest month-over-month drop since November 2008 – as energy and naphtha prices continued to slide. Petrochemical prices, expressed as a monthly average, spiraled $222 per metric ton (/mt)  from November to $984/mt in December, according to the just-released monthly Platts Global Petrochemical Index (PGPI). This is the lowest level since June 2009, when global markets were recovering from the 2008 collapse of Lehman Brothers.

The PGPI is a benchmark basket of seven widely used petrochemicals and is published by Platts, a leading global energy, petrochemicals and metals information provider and a top source of benchmark price references.  On a year-over-year basis, petrochemical prices were down 30% compared with the same month last year.

To view the accompanying graphic, visit this link: PGPI Averages. The chart 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.

"Crude and naphtha prices were both down more than 20% last month," said Jim Foster, director of petrochemical analysis at Platts. "When the prices of feedstocks are falling that fast, the derivatives are bound to follow. Petrochemical prices are unlikely to bottom out until energy prices find a floor."

Monthly average Dated Brent prices fell 21% and naphtha prices were down 23% in December from November.

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.

OLEFINS 
Prices of olefins – a group of hydrocarbon compounds which are the building blocks to many petrochemical products used to produce everyday goods – posted double-digit falls in December. Ethylene prices tumbled 17% to $978/mt and propylene prices were down 25% to $869/mt.

Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, saw relatively small drops in prices. Global polyethylene fell to $1,401/mt, down 8%, while polypropylene fell to $1,354/mt, down 12%. The plastic prices are lagging the olefins prices as higher-priced contracted olefin feedstocks are currently being used to process the polymers.  

AROMATICS 
Prices of aromatics – a group of scented hydrocarbons with benzene rings used to make a variety of petrochemicals – also saw a sharp decline in December. Benzene saw the largest drop of any component in the PGPI, with prices shedding 27% from November to $740/mt in December. Toluene prices dropped more than 20% to $669/mt, while paraxylene prices slid 14% to $825/mt.

The price decreases in global petrochemical markets occurred despite mostly stable global equity markets in December. The London Stock Exchange Index (FTSE) posted a 2% decline, while both the Dow Jones Industrial Average and Nikkei 225 were flat.   

To access a summary of the December performance of each of the seven key petrochemicals included in the PGPI, visit this link: http://www.platts.com/newsfeature/2014/Petrochemicals/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, metals and agriculture 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 biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets. A division of McGraw Hill Financial (NYSE: MHFI), Platts is based in London with more than 1000 employees in more than 15 offices worldwide. Additional information is available at www.platts.com.

About McGraw Hill Financial: McGraw Hill Financial, a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power and McGraw Hill Construction. The Company has approximately 18,000 employees in 30 countries. Additional information is available at www.mhfi.com.

Global: Kathleen Tanzy, 1 212 904 2860, [email protected]

SOURCE Platts

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