INSIGHT INTERACTIVE: C3/C4 price rises, crude drive January IPEX higher

Source: ICIS News


LONDON (ICIS)--Much higher propylene and butadiene prices helped push the regional and global ICIS Petrochemical Indexes (IPEXs) up sharply in January.

Representing a basket of 12 of the most widely used petrochemicals and polymers the indexes were higher across all regions as crude gains fed through into feedstock costs and market sentiment.

But the US IPEX was pushed higher, particularly by an 18% increase in propylene prices from December 2017 and a close to 13% increase in polypropylene.

US propylene prices rose by almost $198/tonne, as propane dehydrogenation (PDH) unit shutdowns and a delayed start-up of a new plant helped tighten the market.

Delayed by Hurricane Harvey, a new Enterprise PDH unit in Mount Belvieu in Texas continued to ramp up production. A PDH plant at Dow Chemical’s Freeport, Texas, site was offline for maintenance. A Flint Hills Resources’ PDH plant in Houston, Texas was also in shut down for a short while.

The rise in the butadiene price in the US month on month was significant, at 5%, but only half the increase registered in northwest Europe (in US dollar terms) and northeast Asia.

US methanol contract prices were also much higher in January largely due to the prospect of plant shutdowns later in the first quarter alongside higher prices globally. Methanol prices in northwest Europe in the month were 23% higher for example, on tight supply and lower output in China.

The US IPEX was up 2.4% from December.

The IPEXs for northwest Europe and northeast Asia were both more than 3% higher while the global IPEX rose 3.7%.

In northwest Europe, IPEX basket prices calculated in US dollars were driven higher by the strengthening euro. But propylene prices increased greater than the average notwithstanding the double digit increases registered from methanol and butadiene.

Northeast Asia markets for butadiene, propylene methanol and polypropylene pushed higher reflecting the global price trends, illustrating to some extent inter-regional market price influence.

Inter-regional price influence was also apparent in the around 3% decline in benzene prices in the US and northwest Europe.

The 12 products in the IPEX basket are: ethylene, propylene, butadiene, benzene, toluene, styrene, paraxylene (PX), methanol, polyethylene (PE), polypropylene (PP), polystyrene (PS) and polyvinyl chloride (PVC).

The index values are subject to change as contracts may settle retrospectively. The US styrene contract price for January has yet to settle.

By Nigel Davis