Petrochemical products prices have improved in recent weeks, reaching the highest levels yet for 2009. Downstream products such as benzene and polymers have recovered from industry lows of Q4 2008 and Q1 2009. As per Abdelghani Henni, the improvement of crude oil in international markets, which has maintained its position above US$65 has had a positive impact on petrochemical products. The increase of crude oil had a positive impact on naphtha which has been on a bullish run since the start of the year. Naphtha traded in August traded at US$645/ton, a 38% increase compared to the January low of US$396/ton.
The improvement of demand from key markets in the Far East mainly South Korea, China and Japan came as converters and manufacturers restocked inventories which have been run down since Q4 2008. Demand is expected to ease somewhat this week, as stock levels in major Asian hubs have recovered. Demand from the Middle East has also increased in the period before Ramadan, largely thanks to demand upswing from the consumer packaging sector. Basic petrochemical products (mainly the ethylene and propylene) have continued their price recovery too. Ethylene prices reached a peak in July at US$1020, before easing below US$1000/ton during the last week of August. Propylene trades have also been bullish, reaching a year record US$1105/ton in August, up from US$590/ton in January. Benzene reached its highest traded price for the year in August. The market peaked at US$910/ton before slipping back to US$850 due to the increase of demand from the USA.
Polymers have followed the trend of basic chemicals. High density polyethylene (HDPE) traded at a 2009 record US$1305/ton in August. Demand has seen a spike following the need to replace stocks run down in H1 as well as due to the increase of ethylene prices. Polypropylene also improved in last two months, reaching its highest level for 2009 at US$1240/ton, a 35% increase from a January low of US$800/ton. Intermediates products have also soared, MEG is up 42% since March. The last two months saw stocks bound for Asia reach US$765/ton, on the back of strong intermediates demand from Korea and Japan.