Europe IBAP hits 6-month high as auto production costs rise

Mark Victory

08-Jun-2015

LONDON (ICIS)–The European ICIS Basket of Automotive Petrochemicals (IBAP) rose for the third consecutive month in May, climbing to its highest level since November 2014, ICIS analysis showed on Tuesday.

The Europe IBAP is weighted on the percentage amount of each petrochemical used in an average passenger car to give a petrochemical-based raw material cost per tonne of a vehicle’s total weight.

The rise in the IBAP demonstrates the rising cost of petrochemical raw materials in automotive production, with the IBAP approaching close to levels seen prior to the recent slump in crude oil prices.

Europe May IBAP EURO

For May, the Europe IBAP was at €303.01/tonne, a rise of €11.25/tonne from April.

The rise in US dollar terms was considerably sharper, rising by $20.22/tonne. The Europe IBAP increase was lower than in euro terms, demonstrating the continued volatility of exchange rate movements.

Europe May IBAP DOLLAR

The increase in the Europe IBAP was predominantly driven by continued price rises in the polypropylene (PP) and nylon 6 markets. Higher PP prices were the result of severe tightness in the market resulting from several local force majeures and global supply shortages.

Nylon 6 May price rises were caused by a €145/tonne rise in the upstream benzene contract price, strong demand and low producer margins.

Average IBAP cost per vehicle weight class

Weight class (Kg)

April (€)*

April ($)*

May (€)*

May ($)*

Small (900-1,200)

262.58-350.11

284.04-378.72

272.71-363.11

302.59-403.46

Lower Mid (1,200-1,400)

350.11-408.46

378.72-441.84

363.11-424.21

403.46-470.70

Upper Mid (1,400-1,600)

408.46-466.81

441.84-504.96

424.21-484.82

470.70-537.94

Large (1,600-2,000)

466.81-583.51

504.96-631.20

484.82-606.02

537.94-672.43

*rounded to 2 decimal places

The IBAP comprises prices for PP, polyethylene (PE), ABS, nylon, polyvinyl chloride (PVC), polycarbonate (PC), isocyanates, polyols, styrene-butadiene-rubber (SBR), polyethylene terephthalate (PET), base oils and soda ash. In Asia and Europe, the IBAP additionally includes prices for polyacetal (POM) and polybutylene terephthalate (PBT), which ICIS does not cover in the US. Weightings are based on American Chemistry Council (ACC) and European Automobile Manufacturers Association (ACEA) data.

To see the Global IBAP, click here
To see the Asia IBAP, click here
To see the US IBAP, click here

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