Platts: January petrochemical prices surge 9% on restocking and tight supply

Source: Platts Global Petrochemical Index

Prices in the $3-trillion-plus global petrochemicals marketplace surged in the first month of 2012, climbing 9% to $1,270 per metric ton (/mt) in January, according to the just-released monthly average of the Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals.

The January increase was the largest monthly gain in 24 months and was driven by restocking after the year-end holiday period and in response to supply tightness in some regions. It follows an less–than-1% drop in the December PGPI monthly price average to $1,161/mt and marks a 6% decline from the January 2011 average price.

Petrochemicals prices traditionally rise in January, according to Platts, the founder of the index and the physical market price assessment processes for each of its components. In fact, over the past three years, the largest gains of the calendar year have occurred in January. Since the PGPI was introduced in August 2007, January prices have averaged 9.7%.

PLATTS GLOBAL PETROCHEMICAL INDEX IN DOLLARS PER METRIC TON

The daily price reflected as a monthly average 

Jan-'12

Monthly
%
Change

Annual
%
change

Jan-'11

Dec-'11

Nov-'11

Oct-'11

Sep-'11

$1,270

+9%

- 6%

$1,351

$1,161

$1,162

$1,200

$1,324

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.

All seven of the PGPI components' monthly averages were stronger in January. The largest increase was seen in the benzene market, which gained 16% to $1,200/mt, up from $1,033/mt in December. The stronger benzene price was attributed to higher pyrolysis gasoline prices in Europe and increased demand globally. Supplies also were tight in the U.S. in January as several domestic producers were facing production related issues, resulting in more exports from Asia to the United States.

Propylene prices also posted double-digit gains in January, climbing 13% to $1,200/mt, up from $1,057/mt in December. The increase was attributed to tightness in the market caused by cracker turnarounds.

On an end-of-day, end-of-month basis, the PGPI market-on-close value was $1,353/mt on January 31 – a 15% increase compared to the end-of-day, end-of-month value for December of $1,173/mt. Month-end closing prices are often used for valuing portfolios.

The increases in the January PGPI outpaced gains in global equity markets. Through January, the Dow Jones Industrial Average (DJIA) posted 3.4% gains, while the Nikkei 225 climbed 4.1%. The London Stock Exchange Index (FTSE) gained 2%.

To access a summary of the January performance of each of the seven key petrochemicals included in the PGPI, visit this link: http://www.platts.com/newsfeature/2012/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 Platts Petrochemical Alert, a real-time news service, 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, consult Platts Media Center. For more information on petrochemicals, visit the Platts website at www.platts.com.


Sign up for PennEnergy's eNewsletters
For Email Newsletters you can trust


Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...

Latest PennEnergy Jobs

PennEnergy Oil & Gas Jobs