Global petrochemical prices fall to six-year lows

Prices in the $3-trillion-plus global petrochemicals market in September fell to lows not seen since May 2009 as values across the energy complex remained soft, according to the just-released monthly Platts Global Petrochemical Index (PGPI).  

Petrochemical prices, expressed as a monthly average, fell $102/ton from August to $786/ton in September. This is the second straight month where the average monthly price has fallen more than $100.

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

"Crude and naphtha prices were mostly stable to slightly higher during the past month," said Jim Foster, head of analysis for petrochemicals and agriculture at Platts. "We're still seeing petrochemical prices declining as recent drops in crude oil and naphtha prices continue to reach the consumers."

On average, crude oil prices were up 79 cents/bbl, or 2%, in September from August. Naphtha prices were also up 2% or 5 cents/gal. Prices of olefins tend to track naphtha prices since naphtha is the most widely-used feedstock in petrochemical cracker processes worldwide. This past month, however, olefins prices tumbled as much as 24%, which is on par with the degree of the price decline in naphtha during the past two months.

As a group, olefins prices were sharply lower last month. Propylene, which can be made at both the refinery and the cracker, slipped 24% to $559/ton in September, down $180 from August. Ethylene, which is primarily produced at crackers, fell 13% to $761/ton in September, down $114 from August.

Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, were both lower in September.  Global polyethylene prices fell 5% to $1,239/ton, while polypropylene prices fell 7% to $1,143/ton.

Prices of aromatics were also lower last month. Benzene posted the largest drop, falling 12% to $586/ton in September, down $80 from August. Toluene prices fell 4% in September to $609/ton, down $28 from August. Paraxylene, the final aromatic included in the PGPI, was down 3% in September to $765/ton, down $20 from August.

Petrochemical prices moved in line with global equity markets in September. The Dow Jones Industrial Average fell 1% while The London Stock Exchange Index (FTSE) fell 5%. The NIKKEI 225 was down 8%.