Global petrochemical prices fell 5 percent in March on weak demand

Global petrochemical prices fell 5 percent in March on weak demand

Friday, April 12, 2013

London, England – Prices in the $3-trillion-plus global petrochemicals market fell 5 percent to $1,378 per metric ton (/mt) in March, according to the just-released monthly average of the Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals. This followed a 6 percent increase in February. On a year-over-year basis, petrochemical prices also were down 5 percent from the March 2012 average price of $1,445/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. “Of the three groups of chemicals making up the Platts Global Petrochemical Index aromatics, polymers and olefins – the aromatics posted the largest price decline in March,” said Jim Foster, Platts senior petrochemicals analyst. “Asian demand for xylenes wasn’t there last month, so toluene was not being converted to xylenes or benzene,” he explained. “Styrene plants were shut down, which resulted in length in the global benzene market.” The average price of paraxylene was $1,472/mt in March, down 10 percent from the February level and marking the first decline since June 2012, when the average paraxylene price fell 16 percent. Toluene, which can be converted into xylene and benzene, fell 8 percent in March to $1,197/mt, on weakened Asian paraxylene demand. Global benzene prices also posted an 8 percent decline in March, dropping to an average of $1,301/mt. Benzene is primary raw material input for styrene production. With several styrene plants shut during March for routine maintenance, demand for benzene declined. Olefins prices were lower in March as downstream plastic demand ebbed and raw input costs dropped. The global propylene index in March fell 6 percent to an average price of $1,331/mt, following a February level of $1,411/mt. The price decline in propylene, which is used to produce polypropylene, also spurred a pull-back in the March global polypropylene price index, which slipped 3 percent to $1,528/mt. Ethylene, the second olefin component of the PGPI, saw a 4 percent price index retreat in March to $1,349/mt, following the February average of $1,403/mt. Polyethylene, which is produced from ethylene, saw a similar price decline last month. It was down 3 percent to $1,538/mt. Petrochemical prices moved counter to price trends in the global equity markets in March. The Dow Jones Industrial Average (DJIA) was up 4 percent last month, while the London Stock Exchange Index (FTSE) edged up 1 percent and the Nikkei 225 jumped 7 percent. 

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