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Platts Global Petrochemical Index

A Platts.com News & Analysis Feature



Platts Global Petrochemical Index

A Platts.com News & Analysis Feature


Platts: Global Petrochemical Prices Followed Crude, Naphtha Lower in July


Prices in the $3-trillion-plus global petrochemicals market fell for the first time in five months in July, following the decline in the energy complex, according to the just-released monthly Platts Global Petrochemical Index (PGPI).


Petrochemical prices, expressed as a monthly average, fell $91 per metric ton (/mt) from June to $1,013/mt in July. The last time global petrochemical prices fell on a monthly average was January of this year, when prices fell 14% to $850/mt.


The PGPI is a benchmark basket of seven widely used petrochemicals and is published by Platts, a leading global provider of energy, petrochemicals, metals and agriculture information and a top source of benchmark price references.


"With crude oil prices down 9% and naphtha prices down 14%, there really wasn't anywhere for petrochemical prices to go but lower," said Jim Foster, head of analysis for petrochemicals and agriculture at Platts, a leading global provider of energy and commodities information and benchmark price assessments.


"Crude oil is now below $50 per barrel. That ripples through the petrochemical feedstock market, lowering the cost of production for everything from aromatics to polymers."


PLATTS GLOBAL PETROCHEMICAL INDEX IN DOLLARS PER METRIC TON
The daily price reflected as a monthly average


July
2015


Monthly % Change


Annual % change


July
2014


June
2015


May
2015


April
2015


March
2015


$1,013


-8%


-30%


$1,446


$1,104


$1,093


$1,052


$954



PGPI Average


The chart above shows the daily end-of-day Platts Global Petrochemical Index (PGPI) price in red and also displays the 20-day PGPI moving average (MA) in blue.


On average, crude oil prices were down $6 per barrel in July from June, a drop of 9%. Naphtha prices were down 52 cents/gal, or 14%. Olefins prices tend to track naphtha prices since naphtha is the most widely used cracker feedstock worldwide.


Petrochemicals are used to make plastic, rubber, nylon and other consumer products and are utilized in manufacturing, construction, pharmaceuticals, aviation, electronics and nearly every commercial industry.


Olefins


Prices of olefins -- a group of hydrocarbon compounds which are the building blocks to many petrochemical products used to produce everyday goods -- were lower last month.


Propylene, which can be made at both the refinery and the cracker, slipped 11% to $819/mt in July, down $103 from June.


Ethylene, which is primarily produced at crackers, fell 12% to $1,044/mt in July, down $141 from June.


Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, were both lower in July. Global polyethylene prices fell 5% to $1,435/mt, while polypropylene prices fell 7% to $1,312/mt.


Aromatics


Prices of aromatics -- a group of scented hydrocarbons with benzene rings used to make a variety of petrochemicals -- were also lower last month.


Toluene posted the largest drop, falling 5% to $780/mt in July, down $43 from June.


Benzene prices fell 1% in July to $814/mt, down $10 from June.


Paraxylene, the final aromatic included in the PGPI, was down 3% in July to $869/mt, down $25 from June.


Petrochemical prices moved opposite of the global equity markets in July. The Dow Jones Industrial Average advanced 1% while The London Stock Exchange Index (FTSE) climbed 3%. The NIKKEI 225 was up 2%.


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 a real-time news service Platts Petrochemical Alert 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. A sample list of experts may be found at the Platts Media Center. For more information on petrochemicals, visit the Platts website at www.platts.com.


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