Continued weakness in Asia prices has resulted in the April ICIS Petrochemical Index (IPEX) declining to a four-month low. A 2.2% fall in the index was registered from the revised March figure of 334.36.
Of the 12 petrochemicals assessed in Asia, all prices apart from styrene and paraxylene (PX) – which have contracts to settle – posted lower values in March. Butadiene (BD) prices were particularly beleaguered following oversupply in previous months, falling by 16.1%.
Demand from downstream synthetic rubber has subsided, as natural rubber has been preferred following lower prices in 2014. Higher prices looked more promising towards the end of the month, as a feeling of tight supply crept in.
Unscheduled and scheduled maintenance plant shutdowns in the region, as well as increased exports to the US and Europe, were the main reasons for this outlook. Along with the BD price decline, methanol prices softened considerably to stand at a seven-month low.
Conversely, BD prices in the US and Europe rose by the most among the constituents in the two regions. Prices were up by 13.3% and 9.4% in dollar terms, respectively. The higher prices came on the back of a force majeure, technical issues and planned maintenance.
Supply in Europe will be dented because of the immediate closure of the 320,000 tonne/year INEOS G4 cracker, which was confirmed in late March. The closure is scheduled to occur in 2015.
Despite the higher BD prices, the US and European sub-indexes were relatively unchanged. Weaker benzene prices in both regions weighed down the index. Other price activity of note was the 20-month low of US paraxylene (PX) prices and a 3.2% fall in European styrene values in dollar terms. European prices benefited from a weaker dollar in the month.
Published at the beginning of each month, the IPEX provides an independent indicator of average change in world petrochemical prices. The IPEX product basket of 12 essential petrochemical products comprises ethylene, propylene, benzene, toluene, PX, styrene, methanol, BD, polyvinyl chloride (PVC), polyethylene (PE), polypropylene (PP) and polystyrene (PS).
Dating back to January 1993, historical ICIS prices for these products in the US, western Europe and northeast Asian markets have been weighted by regional nameplate capacity to generate the monthly index value.
The March IPEX has been revised from 337.15 to 334.36 following the settlements of February contract prices for ethylene, styrene, PX and PVC in the US and styrene and PX in Asia. The April index will be subject to further revision once March contract prices settle for ethylene, styrene and PVC in the US, styrene and PX in Asia and PX in Europe.