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Global Petrochemical Prices Plunged 18% in December Platts Global Petrochemical Index

January 19, 2015

A Platts.com News & Analysis Feature

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Prices in the $3-trillion-plus global petrochemicals market fell another 18% in December; the biggest month-over-month drop since November 2008; as energy and naphtha prices continued to slide.

Petrochemical prices, expressed as a monthly average, spiraled down $222 per metric ton (/mt) from November to $984/mt in December, according to the just-released monthly Platts Global Petrochemical Index (PGPI).

The PGPI is a benchmark basket of seven widely used petrochemicals and is published by Platts, a leading global energy, petrochemicals and metals information provider and a top source of benchmark price references.

On a year-over-year basis, petrochemical prices were down 30% compared with the same month last year.

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Platts Global Petrochemical Index

PLATTS GLOBAL PETROCHEMICAL INDEX IN DOLLARS PER METRIC TON The daily price reflected as a monthly average

December 2014

Monthly % Change

Annual % change

December 2013

November 2014

October 2014

September 2014

August 2014

$984 -18% -30% $1,406 $1,205 $1,324 $1,384 $1,427

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Platts Global Petrochemical Index

The chart above shows the daily end-of-day Platts Global Petrochemical Index (PGPI) price in red and also displays the 20-day PGPI moving average (MA) in blue.

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Platts Global Petrochemical Index

"Crude and naphtha prices were both down more than 20% last month," said Jim Foster, director of petrochemical analysis at Platts. "When the prices of feedstocks are falling that fast, the derivatives are bound to follow. Petrochemical prices are unlikely to bottom out until energy prices find a floor."

Monthly average Dated Brent prices fell 21% and naphtha prices were down 23% in December from November.

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.

Olefins

Prices of olefins - a group of hydrocarbon compounds which are the building blocks to many petrochemical products used to produce everyday goods; posted double-digit falls in December.

Ethylene prices tumbled 17% to $978/mt and propylene prices were down 25% to $869/mt.

Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, saw relatively small drops in prices.

Global polyethylene fell to $1,401/mt, down 8%, while polypropylene fell to $1,354/mt, down 12%. The plastic prices are lagging the olefins prices as higher-priced contracted olefin feedstocks are currently being used to process the polymers.

Aromatics

Prices of aromatics - a group of scented hydrocarbons with benzene rings used to make a variety of petrochemicals - also saw a sharp decline in December.

Benzene saw the largest drop of any component in the PGPI, with prices shedding 27% from November to $740/mt in December.

Toluene prices dropped more than 20% to $669/mt, while paraxylene prices slid 14% to $825/mt.

The price decreases in global petrochemical markets occurred despite mostly stable global equity markets in December.

The London Stock Exchange Index (FTSE) posted a 2% decline, while both the Dow Jones Industrial Average and Nikkei 225 were flat.

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Platts Global Petrochemical Index

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A key ingredient to styrene, used in packaging, various plastics, nylon and other textiles.

Global benzene prices fell 27% in December to $740 per metric ton (/mt) from $1,014/mt in November, according to the just-released PGPI data expressed as a monthly average.

Tumbling crude and naphtha prices had dragged benzene prices lower.

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Platts Global Benzene Price Index

A key ingredient to polyethylene, the most widely used plastic in textiles and polyvinyl chloride (PVC), widely used in construction for window frames, water pipes, garden furniture and packaging.

Global ethylene prices tumbled 17% in December to $978 per metric ton (/mt), from $1,177/mt in November, according to the just-released PGPI data expressed as a monthly average.

Ethylene prices were trending down with decreasing naphtha prices.

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Platts Global Ethylene Price Index

Used in thin film for packaging and coatings for cables and injection moulds.

Prices of low-density polyethylene decreased 8% in December to $1,401 per metric ton (/mt), according to the just-released PGPI data expressed as a monthly average.

Polyethylene prices fell at a rate slower than feedstock ethylene, which saw prices plunge 17% in December.

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Platts Global LDPE Price Index

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An aromatic petrochemical that can be used as a solvent in paint thinner, rubber, glue, lacquers, polyurethane foam for furniture, and as an octane booster in gasoline. It also can be converted into benzene and xylenes.

Toluene, an aromatic petrochemical included in the PGPI, slid 21% in December to $669 per metric ton (/mt), according to the just-released PGPI data expressed as a monthly average.

Toluene prices were moving in line with crude oil and naphtha prices, which declined 21% and 23% respectively in December.

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Platts Global Toluene Price Index

Used in fibers and polyethylene terephthalate (PET) for plastic bottles.

Paraxylene prices plummeted 14% to $825 per metric ton (/mt) in December, according to the just-released PGPI data expressed as a monthly average.

Aromatic petrochemicals were lower across the board as prices of feedstocks naphtha and crude oil tumbled.

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Platts Global Paraxylene (PX) Price Index

A key ingredient to one of the most versatile plastics used in bottle caps, automotive components, instrument panels, interior trims.

Prices of propylene, the olefin raw input used in the manufacturing of polypropylene, plunged 25% in December to $869 per metric ton (/mt), according to the just-released PGPI data expressed as a monthly average.

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Platts Global Propylene Price Index

Used in reusable containers and automotive components, electric equipment, ropes, carpets and textiles.

Prices for the second polymer component of the PGPI – polypropylene – fell 12% in December to $1,354 per metric ton (/mt,) according to the just-released PGPI data expressed as a monthly average.

The fall was less than feedstock propylene, which fell 25% during the same period.

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Platts Global Polypropylene Price Index

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To access a summary of the May performance of each of the seven key petrochemicals included in the PGPI, visit: http://www.platts.com/news-feature/2015/petrochemicals/pgpi/index.

The PGPI reflects a compilation of the daily price assessments of physical spot market ethylene, propylene, benzene, toluene, paraxylene, low-density polyethylene (LDPE) and polypropylene as published by Platts and is weighted by the three regions of Asia, Europe and the United States. Used as a price reference, a gauge of sector activity, and a measure of comparison for determining the profitability of selling a barrel of crude oil intact or refining it into products, the PGPI was first published by Platts in August 2007.

Published daily in a real-time news service Platts Petrochemical Alert and other Platts publications, the PGPI is anchored by Platts' robust and long-established price assessment methodology and the firm's 100-year history of energy price reporting.

Platts petrochemicals experts are available for media interviews. A sample list of experts may be found at the Platts Media Center. For more information on petrochemicals, visit the Platts website at www.platts.com.

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About PGPI

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Platts petrochemicals experts are available for media interviews. A sample list of experts may be

found at the Platts Media Center. For more information on petrochemicals, visit the Platts website

at www.platts.com. Additional media contact: Elizabeth Catalano at elizabeth.catalano@platts.com

or +44 207 176 6024.

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About Platts