LONDON (ICIS)--Petrochemical and polymer players saw a strong end to 2017 with key commodity prices up month to month and year to year, ICIS data showed on Tuesday.
The year on year changes in the global and regional ICIS Petrochemical Indexes were significant. The global IPEX was up 2.5% month to month in December and up 7.6% year on year driven by a 22.8% increase in the regional index value for northwest Europe, an increase of 15.1% in the US IPEX and a northeast Asia index down 1.9%.
The global IPEX was 17% higher in 2017 than in 2016.
The petrochemical industry had been riding a wave of largely higher prices in recent months, driven by higher crude oil prices and stronger markets in the US, northwest Europe and Asia.
It is the stronger market fundamentals, underpinned by economic growth in the US and in western Europe, alongside continued growth in China, that has benefitted sector players generally.
US ethylene contracts for December were down reflecting lower ethane prices.
Hurricane Harvey impacts were easing in the US but benzene prices continued to move up sharply – 17.3% higher in the month (21.6% higher in Europe) and 5.2% higher in northeast Asia.
Propylene prices were higher in all three regions but butadiene prices continued to be volatile – up 13.2% in northeast Asia compared to November but down 13.3% in the US and down 11.8% in northwest Europe.
Higher, and sometimes volatile, cracker co-product prices have been a feature of 2017 and helped buoy the regional IPEXs.
Polyolefins prices in December were little changed from November probably reflecting the seasonally quieter calendar year-end period.
The interactive IPEX chart lets users pick an index (or indexes) and a time period. The accompanying graphic charts global IPEX values relative to Brent crude.
The relationship between petrochemical prices and crude costs is clear, with the chart illustrating the upward movement in petrochemical prices since July last year, driven by higher priced oil.
Over the July to end-December period, Brent crude prices rose from $48/bbl to $66/bbl, an increase of 31%. Petrochemical prices as reflected in the global IPEX were up 12%.
The IPEX values represent the movement in monthly prices for 12 major commodity petrochemicals and polyolefins: ethylene, propylene, benzene, toluene, styrene, butadiene, methanol, paraxylene (PX), polyvinyl chloride (PVC), polystyrene (PS), polyethylene (PE), polypropylene (PP), each weighted for regional capacity.
The ICIS index values will be subject to some change given the fact that the December paraxylene price in the US has yet to settle.
By Nigel Davis