Global petrochemical prices in January at lowest levels since mid 2009

20-Feb-15

Global petrochemical prices in January has ebbed to low levels last seen in mid 2009- falling by 14% month over month in January and 40% year-over year. With a six-month slide triggered by falling crude oil and naphtha prices, petrochemical prices, expressed as a monthly average, fell US$133/mt from December to US$850/mt in January, according to Platts Global Petrochemical Index (PGPI). "Crude prices fell nearly 25% and naphtha prices were down 16% month over month in January," said Jim Foster, Platts director of petrochemical analysis. "With feedstock prices falling like that, there's really no other direction for petrochemicals to go than down. There have been signs of price increases since the end of January. The question being asked by the industry now, though, is if this current rally is sustainable – or just a short-term correction." Prices of olefins posted double-digit declines in January. Ethylene prices tumbled 15% from December to US$834/mt and propylene prices were down 10% to US$786/mt. Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, posted similar month-over-month drops in price. Global polyethylene fell to US$1230/mt, down 12%, while polypropylene fell 14% to US$1165/mt. Prices of aromatics also saw a sharp price decline in January. Benzene posted the largest drop of any component in the PGPI, with prices shedding 18% from December to US$604/mt in January. Toluene prices fell more than 17% to US$554/mt, while paraxylene prices slid 12% to US$729/mt.