IPEX keeps steady in May

01 May 2012 12:32  [Source: ICIS news]

LONDON (ICIS)--The ICIS petrochemical index (IPEX) for May has remained relatively flat at 359.91, close to its revised* April figure of 360.01.

Further improvements were seen in the US and European indices, with growth of 0.8% and 1.4% in dollar terms respectively, in spite of the dollar strengthening by 0.5% against the euro over the same period. These gains offset a 1.0% downturn in the Asian component.

Chemicals in the IPEX basket are displaying similar price trends to last month, although the increases are not as strong this month. Butadiene (BD) in the US saw the largest price hike of all the chemicals in the IPEX basket, improving by almost 6%. The price momentum originates from limited supply issues as a result of heavier-feedstock cracker turnarounds, rather than strong demand.

In contrast, BD prices in Asia slumped by just over 7%, stemming from weak downstream demand as several synthetic rubber plants have either been shut for maintenance or running at reduced operating rates. The main end-use for BD-derived downstream products such as butadiene rubbers is the automotive industry, which has been impacted greatly by the slowdown of the major Asian economies such as China and India.

Polystyrene (PS) and paraxylene (PX) are the only chemicals to experience lower prices in all three regions in dollar terms. PX prices are driven by Asia, which had a fall of almost 4%, with Europe following suit and the US falling by 4.3%. Demand from end-users is weak, and a European buyer said that demand is lower than in the same period in 2011 and that higher prices would be difficult to pass on to customers in derivatives markets.

In general, the aromatics sub-index of the IPEX was the most hit, with price decreases of around 2% on average for all three regions. Benzene fell the most in Europe, dropping by 4.5% in dollar terms, the main reason being that supplies were long and demand was weak.

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 PS.

IPEX May 2012

* The April IPEX has been revised from 359.21 to 360.01, following incorporation of the US March ethylene, styrene and PVC and Asian styrene contract prices. This month’s index is also subject to revision once the US April ethylene and styrene and Asian styrene contracts settle.

The revised historical IPEX data is available from ICIS on request
Click here for a full methodology of the revised IPEX

Author: Afsar Hussain

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ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

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