Rise in May petrochemical prices of 4% marks the fourth consecutive month of increase

04-Jun-15

Prices in the US$3 trillion-plus global petrochemicals market climbed another 4% month over month in May. This marks the fourth month of rebound following six consecutive months of falling prices. Petrochemical prices, expressed as a monthly average, increased US$41 per metric ton from April to US$1093/mt in May, according to the just-released monthly Platts Global Petrochemical Index (PGPI). “Global petrochemical prices continue to climb, but remain well below last year’s prices,” said Jim Foster, director of petrochemical analysis at Platts. “Since January, petrochemical prices have advanced 29%, mostly because of stronger crude oil and naphtha prices. But on a year-over-year basis, May 2015 prices are down 20%. In May 2014, the PGPI index was at US$1361/mt.” Crude oil prices were up 8% in May from April and naphtha prices were up 6%. Olefins prices tend to track naphtha prices, given that naphtha is the most widely used cracker feedstock worldwide. Prices of olefins jumped 2-5% in May on the back of stronger naphtha prices. Ethylene prices gained 5% in May from April to US$1151/mt and propylene prices were up 2% to US$936/mt. Polyethylene and polypropylene posted similar month-over-month price gains. Global polyethylene prices increased 7% to US$1529/mt, while polypropylene prices were up 6% to US$1444/mt. Prices of aromatics were mixed last month. Benzene was the only component in the PGPI to post lower prices in May, falling 5% to US$787/mt. “Benzene prices were lower due to the substantial demand gap from downstream derivatives,” Foster said. “For example, at least 10% of European styrene capacity – which totals more than 6.6 mln metric tpa – is estimated to be offline in June. Phenol production, the second largest use of benzene after styrene, experienced planned and unplanned maintenance turnarounds at various plants, which had an impact on benzene demand.” Toluene and paraxylene, the two other aromatic PGPI components, saw stronger prices in May. Toluene was up 7% to US$778/mt while paraxylene increased 3% to US$888/mt.