November IPEX up 0.8% as crude pushes higher, but producers have gains to make

LONDON (ICIS)–Petrochemical prices have been rising for the past five months on the back of higher crude values, with the ICIS Petrochemical Index for November edging up by 0.8% from the previous month the data showed on Tuesday.

But the overall gains mask very different regional dynamics, with Asia prices up relatively strongly when compared to Europe, and prices in the US falling over time.

The strong influence of the crude price and, consequently, that of liquid feedstocks, is apparent in the data over a period of fluctuating crude market dynamics. While crude supply and demand have come more into balance, the more recent influence of OPEC’s decision to cut production next year – and the agreement by non-OPEC producing nations, including Russia, to do likewise from 1 January 2017 – has had a major influence on chemicals.

For the most recent month, the northeast Asia IPEX has shown a gain of 3.2% following one of 4.2% the month before. The trend has been different when measured in US dollar terms in northwest Europe, with the November regional IPEX up just 0.4% following a drop of 1.6% in October. The US IPEX was down 3.4% in the latest month having lost 0.2% previously.

Feedstock cost dynamics alongside supply and demand in the market have influenced price decisions. Most US olefin producers continue to benefit from abundant and cheap natural gas liquids (NGLs) feedstock, principally ethane. Producers in northwest Europe and northeast Asia are much more closely tied to the naphtha price.

The IPEX represents price movements in a basket of 12 petrochemicals and plastics weighted by capacity. It is calculated each month on a regional as well as a global basis as monthly contracts and local spot prices move.

Petrochemical producers have continued to benefit from margin strength in the lower feedstock cost environment but it is clear that prices have fallen with the cost of crude through 2016 as they did in 2015.

Last year the global IPEX basket dropped 28% compared with 2014. To date this year, the fall has been more modest but a not insignificant 4.7%. It is that dynamic that producers will be seeking to reverse in the higher crude oil price operating environment.


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

The regional and global IPEX monthly values can be subject to change as monthly contract prices are agreed in the regions.

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