Price and market trends: Weak Europe weighs down December IPEX

14 December 2012 10:04  [Source: ICB]

The December ICIS Petrochemical Index (IPEX) has fallen from a revised November figure of 326.24* to 323.39, representing an almost 1% decline on a downturn in the European component of the index.

European chemical prices were the main impetus for the December IPEX fall, declining by 4.0% in dollar terms, after accounting for a 1.1% strengthening of the dollar. The Asian component of the IPEX fell by 0.8% but the US bucked the trend, improving by 2.0%.

ICIS IPEXPolymers were the poorest performing chemical group, with significant price falls in Europe. The polymer sub-index dropped by 2.9%, predominantly driven by a considerable €253/tonne ($325/tonne) price drop for polyvinyl chloride (PVC) in Europe, which represents a 21.6% reduction.

PVC is facing a tough time in Europe as the construction industry is not performing well and the imminent threat from alternatives such as polyethylene (PE) and polypropylene (PP), which have lower environmental implications, is affecting demand.

Aromatics sub-indices performed strongly in all regions, especially in the US. The Asian component of the IPEX fell only slightly, on a 13% fall in butadiene (BD) prices.

The IPEX provides an independent indicator of average change in world petrochemical prices. The IPEX product basket comprises ethylene, propylene, benzene, toluene, paraxylene (PX), styrene, methanol, BD, PVC, PE, PP and polystyrene (PS).

Dating back to January 1993, 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 November IPEX has been revised from 325.97 to 326.24, following settlement of the October contracts for ethylene, styrene and PVC in the US and for styrene in Asia. This month's index is also subject to revision once the November US ethylene, styrene and PVC and Asian styrene contract prices settle.

Author: Afsar Hussain

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