Platts announces petrochemical prices continue 2Q declines on lower oil prices

Tuesday, Jul 10, 2012

LONDON, July 9, 2012 /PRNewswire/ -- Continuing the decline begun in early second quarter, prices in the $3-trillion-plus global petrochemicals market fell in June to an average of $1,104 per metric ton (/mt) for the month. June's average price is down $175 or 14% from the May average, according to the just-released monthly average of the Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals.

June's 14% month-on-month price drop is the largest one-month percentage decline in global petrochemical values since November 2008, when prices fell 38% following the start of the global recession in mid-2008. It follows an 11% decline in the monthly average in May and is down 20% from the June 2011 average.

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

"The price drop in crude oil and naphtha that began in March triggered a knock-on decline in global olefins prices, with propylene and ethylene both dropping about 30% since mid March," said Jim Foster, Platts senior editor of petrochemical analytics. "While the rebound in crude oil and naphtha the last two weeks appears to be helping olefins bottom out, any olefins price rebound will be tempered by continued weak demand and rising inventories."

During the last week of June, the Platts global naphtha index climbed 10%, while crude prices climbed 7%. During that same period, global ethylene and propylene prices gained less than one percent.

All seven components of the PGPI were lower in June on a month-on-month, average monthly price basis. Ethylene showed the largest loss, falling 21% from May. Paraxylene prices were down 16% compared to the May average, while propylene prices fell 14%. In the polymer markets, low-density polyethylene values fell 13% and polypropylene prices were down 10%. The global toluene index in June fell 8% and benzene values fell two percent.

June's PGPI components continued to fall despite slight gains in global equity markets. Through June, the Dow Jones Industrial Average (DJIA) climbed 4%, while the Nikkei 225 and London Stock Exchange Index (FTSE) both climbed 5% during June.

About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals and metals 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 carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, and shipping markets.  A division of The McGraw-Hill Companies (NYSE: MHP), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com .

SOURCE Platts