Petrochemical prices lower globally on plunging crude latest IPEX shows

LONDON (ICIS)–Sharp across-the-board falls in chemical prices are reflected in the latest ICIS Petrochemical Index, which dropped in value by more than 10% last month, the latest data from ICIS show.

The global IPEX based on prices in December 2014 reflected the much weaker price environment in northeast Asia, Europe and the US at the end of the year. Petrochemical prices have been falling, driven by plunging oil and naphtha prices. Both are more than 50% lower than in the middle of the year.

The global IPEX now has a value of 251.40, down from a revised month-earlier figure of 280.36. The base for the index is January 1993. The global IPEX is down 23.2% since the July IPEX.

Monthly IPEX values are often revised as contract settlements are made. The current global IPEX value, for instance, does not include a change in price for ethylene, styrene or PVC in the US, the December contract prices for which had not been agreed when the latest IPEX was calculated, or for styrene in northeast Asia.

The steepest petrochemical price falls have been in Asia where markets have reacted swiftly to declining oil and feedstock prices. The latest northeast Asian IPEX sub-index was down 13.7% month on month at 224.29.

Prices for 12 petrochemical products in three regions are used to create the index. The steepest price falls in Asia last month were for propylene and ethylene (less so for butadiene) and for the aromatics benzene and toluene.

Polypropylene and polyethylene prices were sharply lower as were styrene and polystyrene prices. Products with non oil-related feedstocks were lower but affected less by market uncertainty.

In Europe, the regional IPEX was 7.8% lower at 291.90.

Prices for all petrochemicals and polymers in the sub-index fell, with the most significant falls in monthly contract prices for benzene and styrene.

The impact of the steep drop in the monthly contract price for ethylene and for propylene was less pronounced than might be expected, however, because of the further weakening of the euro against the US dollar. These contract settlements are made in euros but converted to US dollars for consistency.

Price falls in the US were most pronounced in propylene and the aromatics, including paraxylene. Weaker upstream prices were reflected in lower polymer values.

The US IPEX was down 6.7% at 272.53.

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, butadiene (BD), benzene, toluene, paraxylene (PX), styrene, methanol, polyvinyl chloride (PVC), polyethylene (PE), polypropylene 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.

Download global and regional ICIS IPEX data here.
View the full IPEX methodology.