1 April 2016
Petrochemical prices moved higher in March, reversing the trend of recent months, as the oil price rose and producers were successful at passing on oil-related costs which had been increasing since early February, ICIS data shows.
The price movements were reflected in the ICIS Petrochemical Index (IPEX), which climbed by 5.8% in March to a value of 207.73 relative to a 1993 base of 100.
The global index had been tracking down since June 2015 and had been on a downward trend since July 2014 notwithstanding a rally between January and May last year.
The difficult start to the year is reflected in the fact that the IPEX average for the first quarter of this year was down 2.6% from the fourth quarter of 2015. Each of the regional, sub-indexes were lower quarter to quarter.
The Asia regional index for March, however, was higher than for February, reflecting movements in northeast Asia spot prices for a basket of 12 major petrochemicals and polymers*.
Prices in Asia for all the chemicals and polymers in the IPEX basket rose in March apart from styrene which has yet to settle. The increases were led strongly by the olefins: ethylene, propylene and butadiene.
The northeast Asia index rose 10.4% from February and reflected the more immediate impact of largely spot price movements in the region assessed on a weekly basis. This regional IPEX was down 0.9% in the first quarter from the fourth quarter of 2015.
The Europe IPEX is derived from monthly contract prices so tends to reflect market sentiment at the end of the prior month or early in the current month.
The ethylene and benzene contract prices for northwest Europe were lower for March than for February, while price increases were most marked for styrene and polystyrene.
The northwest Europe IPEX was up 1.2% from February but down 4.1% on a quarter to quarter basis.
Oil prices began climbing again in 2016
Prices were largely higher in the US although March contract settlements for a number of chemicals in the ICIS basket were yet to settle when the March IPEX was set.
The regional US index for March was up 1.7% from February but down 4.3% quarter to quarter.
Current IPEX values for March are subject to revision when a March styrene price for northeast Asia becomes available and when March contracts are settled for US ethylene, paraxylene, styrene and polyvinyl chloride (PVC).
*The IPEX represents price movements in a basket of 12 petrochemicals over the course of each month. The petrochemicals are ethylene, propylene, butadiene, benzene, toluene, paraxylene (PX), styrene, polystyrene (PS), polyethylene (PE), polypropylene (PP), methanol and PVC.
Dating back to January 1993, historical ICIS prices for these products in the US, western Europe and northeast Asian markets have been weighted by regional nameplate capacity to generate the monthly index value.