Petrochemical price index shows continued increases

April 21, 2010
Prices in the $2.8 trillion global petrochemicals business continued to forge ahead in March 2010, hitting new six-month highs and continuing to build on the dramatic gains seen in January, when the Platts Global Petrochemical Index (PGPI) rose 10.4%

Prices in the $2.8 trillion global petrochemicals business continued to forge ahead in March 2010, hitting new six-month highs and continuing to build on the dramatic gains seen in January, when the Platts Global Petrochemical Index (PGPI) rose 10.4%.

The index, a basket of the most widely used petrochemicals prices expressed in dollars per metric ton ($/mt), advanced 0.7% in February and rose again in March to close the month at $1,233/mt, compared with $1,192/mt at the end of February, Platts reports.

First published by Platts in August 2007, the PGPI peaked at $1,679/mt on July 14, 2008 before plummeting to a low of $491/mt on December 5, 2008, on the heels of the global financial meltdown.

“The PGPI price at the end of March was the highest since September 2009 and is up more than 70% from market lows of July 2008,” said Shahrin Ismaiyatim, Platts global editorial director of petrochemicals. He said the rise in petrochemicals prices was largely attributed to the strengthening crude oil values that prompted petrochemical producers to push prices higher to compensate for tight and narrowing production margins. Also contributing to the rise is demand from Europe, India, and Southeast Asia.

Despite the strength in Europe, Asian petrochemicals market saw mixed fortune in March. While Indian and Southeast Asian consumers contributed to the demand for petrochemical products, Chinese consumers were largely taking a step back as most preferred to rely on their existing pre-Chinese Lunar New year inventories.

In the United States, the margin situation is similar and demand is rising. “The uptrend in petrochemical prices will likely continue, given that U.S. economic indicators like non-farm payrolls and consumer confidence rose in March and there are signs of some manufacturing gains with the traditional summer consumer demand season just ahead,” said Ihsan Rahim, Platts managing editor for Americas petrochemicals.

For more information, visit www.platts.com.

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