Global petrochemical prices pevelled off in October

Prices in the $3-trillion-plus global petrochemicals market in October were virtually flat based on a monthly average, but edged slightly when valued on a month-end to month-end basis from September.

However, month-end prices were stronger versus September; marking the first such strength since May 2015.

This is the first time the markets have shown inter-month gains since May of this year, according to the just-released monthly Platts Global Petrochemical Index (PGPI). Petrochemical prices, expressed as a monthly average were $785 per metric ton (mt) in October, down just $1/mt from September.

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. 

''Benzene prices climbed 4 per entg in October,'' said Jim Foster, head of analysis for petrochemicals and agriculture at Platts. ''Exports of benzene out of Korea were down 30 per cent in October, which pinched supplies globally, pushing up price as did the strengthening of upstream prices of crude oil and naphtha.''

Crude oil prices were up 2 per cent in October, while naphtha prices climbed 3 per cent.

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.

As a group, olefins prices were mixed last month, with ethylene posting small gains and propylene prices falling. Propylene, which can be made at both the refinery and the cracker, slipped 5 per cent to $533 per metric ton (/mt) in October, down $26 from September. Ethylene, which is primarily produced at crackers, climbed 1% to $767/mt in October, up $6/mt from September.

Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, were also mixed in October as each derivative closely followed its feedstock price.  Global polyethylene prices rose 1 per cenrt to $1,252/mt, while polypropylene prices fell 3 per cent to $1,114/mt.

Prices of aromatics – a group of scented hydrocarbons with benzene rings used to make a variety of petrochemicals – were stronger across the board last month.  Benzene posted the largest gain of any component in the PGPI, climbing 4 per cent to $612 / mt, up from $586 / mt in September. Tolueneprices gained 2 per cent in October to $621 / mt, up $12 from September.

Paraxylene, the final aromatic included in the PGPI, was up 1 per cent in October to $773/mt, up $8 from September.

Petrochemical prices moved in line with global equity markets in October. The Dow Jones Industrial Average increased 8 per cent. The London Stock Exchange Index (FTSE) gained 5 per cent and the NIKKEI 225 advanced 10 per cent.

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.