Prices in the $3-trillion-plus global petrochemicals market fell 2% to $1,323 per metric ton (/mt) in November, according to the just-released monthly average of the Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals. This follows a drop of less than 1% in October to an average price of $1,351/mt.
However, on a year-over-year basis, petrochemical prices were up 14% from the November 2011 average price of $1,162/mt, according to data published by Platts, a leading global energy, petrochemicals and metals information provider and a top source of benchmark price references.
Petrochemicals are used to make plastic, rubber, nylon, and other consumer products, and are utilized in manufacturing, construction, pharmaceuticals, aviation, electronics, and nearly every commercial industry.
"November petrochemical prices moved almost lock step with global oil prices," says Jim Foster, Platts senior editor of petrochemical analytics. "Crude oil was dominating many other petrochemical-specific supply and demand factors during the month."
The average price of Dated Brent crude oil in November was $109.25 per barrel (/b), marking a 2% drop from the October average of $111.75/b. The Platts Global Naphtha Index slipped by the same percentage in November to $628/mt from the October level of $639.75.
In particular, naphtha weighed on the November prices of ethylene, used in textiles and polyvinyl chloride (PVC), which is widely used in construction for window frames, water pipes, garden furniture and packaging. The Platts Global Ethylene Index fell 7% to $1,252/mt in November, the largest drop of the seven PGPI components. Low-density polyethylene, which is a polymer produced from ethylene, fell 4% in November to $1,424/mt. Polypropylene, another polymer component in the PGPI, fell 2% to $1,435/mt in November. Polypropylene is used in reusable containers and automotive components, electric equipment, ropes, carpets and textiles.
Aromatic petrochemical prices were mostly higher in November, with the largest increase in the global benzene market. Benzene is the key ingredient to styrene, used in packaging, various plastics, nylon and other textiles. The benzene index climbed 5% on tight supply conditions to an average $1,398/mt in November, up from $1,331/mt in October.
"For the second straight month it has been benzene prices, as a share of the overall PGPI, which have been able to offset the lion's share of the losses in the olefins and polyolefins," Foster says. "There continues to be less benzene available globally due to refiners' shift from naphtha to ethane in steam crackers. This is keeping upward pressure on benzene prices."
Also higher in November were global prices of paraxylene (PX), used in fibers and polyethylene terephthalate (PET) for plastic bottles. The Platts PX index rose less than one percent to an average of $1,511/mt, versus the October level of $1,507/mt. Toluene, a petrochemical that can be used for gasoline blending or can be converted into benzene and paraxylene, averaged $1,275/mt in November, down 1% from the October average of $1,281/mt.
Petrochemical prices largely moved opposite to the direction of most global equity markets during November. The Nikkei 225 climbed 6% during November and the London Stock Exchange Index (FTSE) rose 1.5%. The Dow Jones Industrial Average (DJIA) was down 0.5% during November.
Click here to access a summary of the November performance of each of the seven key petrochemicals included in the PGPI.