January IPEX stable as strong Asia offsets weaker US, Europe

04 January 2012 09:38  [Source: ICIS news]

LONDON (ICIS)--The ICIS petrochemical index (IPEX) remained flat at 300.82 in January, a minute change from its revised* December figure of 300.78.

The Asian component of the IPEX strengthened by 4.8%, offsetting falls in the US and in Europe. The US dropped by 3.9% and Europe by 5.9% in dollar terms. The decline in the European index was exacerbated by a 3.1% strengthening of the dollar against the euro.

The Asian component observed the only price rises for some of its basket products. Butadiene (BD) led these hikes, soaring by 47.8%, mainly as a result of limited availability and increased buying interest.

Chinese traders have been securing and storing material in anticipation of rising prices for their upcoming start-ups of new downstream synthetic plants in the first quarter of 2012. Traders have also been seeking to secure material ahead of the Lunar New Year holidays in the region towards the end of January.

However, BD in the US and Europe fell significantly, by 14.8% and 13.5% in dollar terms respectively, as low levels of demand persist for both regions.

The most significant price drop in Asia was in the paraxylene (PX) contract price, falling by 7.3%, with low demand cited as the reason. PX also fell in the US by 8.8% and in Europe by 9.0% in dollar terms, as these markets follow Asia.

Published at the beginning of each month, the IPEX provides an independent indicator of average change in world petrochemical prices.

Dating back to January 1993, historical ICIS prices for a basket of 12 essential petrochemical products in the US, western Europe and northeast Asian markets have been weighted by regional nameplate capacity to generate a monthly index value.

The IPEX product basket comprises ethylene, propylene, benzene, toluene, PX, styrene, methanol, BD, polyvinyl chloride (PVC), polyethylene (PE), polypropylene (PP) and polystyrene (PS).

* The December IPEX has been revised from 300.94 to 300.78, following incorporation of the US November styrene and Asian styrene contracts. The November US PVC contract has still to settle. This month’s index is also subject to revision once the US December ethylene, styrene and PVC and Asian styrene contracts settle.

The revised historical IPEX data is available from ICIS on request
For a full methodology of the revised IPEX, please click here

Author: Afsar Hussain

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