3% fall in November petrochemical prices on lingering economic concerns

09-Dec-11

Prices in the US$3 trillion-plus global petrochemicals marketplace fell by over 3% to US$1162/metric tons in November, according to Platts Global Petrochemical Index (PGPI. This compares to an October average of US$1200/mt and was largely attributed to a slowdown in downstream demand for petrochemicals, according to Platts. However, on an annual basis, the November 2011 PGPI average was down 2.7% from the same period in 2010. On an end-of-day, end-of-month basis, the PGPI market-on-close value was US$1148.97/mt on November 30. This marked a 2% drop compared to the end-of-day, end-of-month value for October 31, 2011 of US$1175.95/mt. Month-end closing prices are often used for valuing portfolios. Industry and market participants in November were keeping their eyes trained on the general consumer, the start of the holiday shopping season and global stock markets for clues as to the true health of the world economy and any signs that petrochemicals demand will increase in the months ahead. Many of the popular items of this year's holiday shopping season -- flat screen TVs, gaming systems, computers, clothes and children's toys -- are made from petrochemical products. Despite a month-on-month uptick in global equity markets by late November and a 3% rise in share values of retail outlets on Monday, November 28, 2011, following the U.S. Thanksgiving holiday, petrochemical markets showed little reaction to the start of the holiday shopping season largely seen as the make-or-break period for determining retailers' full-year performance. The PGPI hit a 12-month low on Tuesday, November 29, of $1,145/mt, the lowest level since October 2, 2010. Six of the seven components of the PGPI were lower in November, based on the monthly averages just released. Bucking the trend was toluene, which posted a 1% small gain due to strong demand from Asia early in November. The largest drop in component price came from paraxylene, which fell more than 10% on weak demand from polyester makers. To access a summary of the November performance of each of the seven key petrochemicals included in the PGPI.