April IPEX up by 7.8% on impact of crude gains in Europe and Asia

LONDON (ICIS)–Strengthening oil prices and feedstock costs helped to drive petrochemical prices significantly higher in April, data from ICIS showed on Thursday.

The ICIS Petrochemical Index (IPEX) for the month was up by 7.8% compared to March 2015, with the northwest Europe regional component rising most strongly – up by 13.4%.

Prices for the major petrochemicals increased markedly in April, reflecting an uptick in crude oil and in some instances a tighter supply/demand balance.

The European ethylene, propylene and benzene contract prices settled up by 6.0%, 6.4% and 24.6% respectively month on month in April on a euro basis, with polymer prices rising also. The olefins and benzene price increases were agreed on a higher average March naphtha price denominated in euros, as well as the supply/demand situation.

The IPEX represents a basket of prices for 12 major petrochemicals weighted by production capacity, and is calculated for three regional markets and on a global basis.

Where agreed, prices for the major olefins, benzene, the major polymers and methanol moved higher in April, ICIS data shows. The US IPEX was up only 1.1%, but has yet to include price settlements for ethylene, styrene and polyvinyl chloride (PVC). The northeast Asia IPEX was up by 9.0%, but did not include a settled contract price for paraxylene (PX).

The global IPEX for April of 245.82 compares with a revised number for March of 228.06, which includes settlements for US ethylene, PX, styrene and PVC, Asian PX and styrene and European PVC.

Monomer and polymer prices in Europe and Asia were pushed higher on the back of higher feedstock naphtha costs. Petrochemical prices tend to follow crude and are not necessarily dependent on alternative feedstock costs.

Petrochemical prices remain much lower than a year ago, however, in the comparably lower oil price environment. All regional IPEXs were lower year on year and the global IPEX was down by 24%.

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, PX, styrene, methanol, 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.

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