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IPEX Shows Petrochemicals, Plastics Markets Reacting to Crude Price Swings

Criada em: 14 março de, 2015

Petrochemical markets in Asia have reacted swiftly to recent rising crude oil and naphtha prices but European and US markets are still feeding through the sharp crude price downturn of the past six months, ICIS data showed on March 9.

The ICIS Petrochemical Index (IPEX), which represents a capacity-weighted basket of 12 primary petrochemical products, fell 1.5 percent in February from January 2015 (the January IPEX has been revised to 214.01 and is based on settled January contract prices for ethylene, styrene and PVC in the US and paraxylene and styrene in Asia).  The index is down 37 percent from February 2014 and 36 percent lower than in August 2014 when crude oil prices began to fall dramatically.

The average Brent crude price was $58.16 [per barrel] in February 2015 down from the $109.89 [per barrel] average in February 2014. WTI crude was $50.72 [per barrel] in February from $100.75 the year before on the same basis.

Crude prices began to drop in August last year and have prompted steep falls in the price of the petrochemical industry’s primary liquid feedstock, naphtha. The rally in crude prices, however, which began at the end of January 2015 has yet to feed fully in to prices for the major petrochemicals given the time lag for costs to pass along the primary petrochemical product chains.

Spot price-driven markets in Asia reacted quickly to the uptick in crude in February. The sharpest increases were in prices for propylene, ethylene, benzene and their derivatives. Contract paraxylene prices continued to fall in an over-supplied market. Paraxylene is a feedstock for the polyester cloth and polyethylene terephthalate (PET) bottle industry.

Petrochemical price movements in the United States were mixed although prices rose for products most directly linked to oil. Ethane and other natural gas liquids (NGLs) predominantly produced from shale gas are the preferred feedstock for many petrochemicals in the United States. Prices have been lower since the second half of last year and in February were in the 16.50 to 20.50 US cents per gallon range. The chart of the US IPEX, WTI and Henry Hub natural gas prices illustrates the cost advantage that American petrochemical producers cracking ethane can achieve (ethane prices in the United States are related to those for natural gas).

Petrochemical prices in Europe have been falling with lower crude and lower naphtha costs and generally continued to drop in February, often significantly. Prices for some commodities rolled over in the quarter in euro terms but were lower in US dollars.

Europe ethylene and propylene prices dropped by more than the equivalent of $100 per tonne in February. Polyolefin prices fell by a greater amount. At the end of January, Europe spot pipeline ethylene prices were at a five year low.

Naphtha prices in Europe in February were $511 per tonne on average, 44 percent lower than in February 2014.

Published at the beginning of each month, the IPEX provides an independent indicator of average change in world petrochemical prices.

The IPEX product basket of 12 essential petrochemical products comprises ethylene, propylene, butadiene (BD), benzene, toluene, paraxylene (PX), styrene, methanol, polyvinyl chloride (PVC), polyethylene (PE), polypropylene and polystyrene (PS).

Dating back to January 1993, historical ICIS prices for these products in the United States, western Europe and northeast Asian markets have been weighted by regional nameplate capacity to generate the monthly index value.

This article was written and contributed by ICIS.

Source: http://explorationworld.com/