13 June 2012 14:29 [Source: ICIS news]
WASHINGTON (ICIS)--US wholesale prices for basic organic chemicals fell by 2.1% in May from April, the Labor Department said on Wednesday, part of an overall 1% decline in producer prices that was led by a sharp 8.9% drop in gasolines.
The 2.1% decline in organic chemicals at the producer level – also known as wholesale prices – offset the 1.6% price rise seen in April.
Wholesale prices for chemicals have been trending down since the 4.4% jump recorded for March.
In contrast, producer prices for plastic resins and materials rose by 0.6% in May, the department said, following a slim 0.1% gain in April and a stronger 0.5% increase in March.
Overall, the department said that its producer price index (PPI) for all finished goods fell by 1% last month, marking a second month of decline after April’s 0.2% easing. The PPI was flat in March.
The decline in the PPI for May was attributed almost wholly to a continuing drop in wholesale prices for energy products, especially gasolines.
The department said that producer prices for energy goods in general fell by 4.3% in May, the largest decline since the 4.6% drop seen in March 2009 when the US was still in recession.
Within the energy products segment, 80% of the pricing decline was attributed to the 8.9% drop in wholesale gasoline prices.
Lower prices for liquefied petroleum gas and residential natural gas contributed to the decline in energy goods prices.
With energy goods and food products backed out of the overall PPI, the so-called core index for wholesale prices rose by 0.2%.
The sharp decline in wholesale gasoline prices suggests that retail prices for the fuel are likely to continue to fall in the weeks ahead, sustaining a pricing fall-off that has seen consumer costs for fuel edge steadily down in recent months.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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