LONDON, March 6, 2012 /PRNewswire/ -- Prices in the $3-trillion-plus global petrochemicals marketplace climbed 10% in February to $1,401 per metric ton (/mt), according to the just-released monthly average of the Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals. The increase marks the PGPI's first double-digit gain since January 2010.
Following on January's 9% increase, the February surge pushed the PGPI to nearly even with the February 2011 average of $1,423/mt. The petrochemical complex was higher across the board in February due to tight supply and a steady climb in crude oil prices.
Global geopolitical tensions in February sent crude oil buyers into the market trying to secure supplies. Dated Brent crude prices climbed 10% during the month to more than $120 per barrel (/b). The West Texas Intermediate crude price rose 9% to $107/barrel.
Petrochemical prices also have been supported by turnarounds, or temporary plant closures, in the many of the product sectors. U.S. aromatics prices climbed as buyers entered the market ahead of a series of maintenance and other turnarounds planned for March. In Europe, an outage at Ineos' steam cracker in Germany led to a force majeure on propylene during the third week of February. In Asia, olefins supply was tight as spot market availability from the Middle East, in particular Saudi Arabia, was low. The lack of Middle East material was due, in part, to a power outage at Jubail in mid-January that affected the petrochemical complexes there.
PLATTS GLOBAL PETROCHEMICAL INDEX IN DOLLARS PER METRIC TON
The daily price reflected as a monthly average
Petrochemicals are used to make plastic, rubber, nylon and other materials for consumer products, packaging, manufacturing, construction, pharmaceuticals, aviation, electronics and nearly every commercial industry.
All seven of the PGPI components' monthly averages were stronger in February. The largest increase was seen in the propylene market, which jumped 16% to $1,391/mt in February, up from January's $1,200/mt. The stronger propylene prices pushed polypropylene prices higher, with the global polypropylene index rising 13% from January to February, from $1,368/mt to $1,550/mt.
On an end-of-day, end-of-month basis, the PGPI market-on-close value was $1,433/mt February 29 – a 6% increase compared to the end-of-day, end-of-month value for January of $1,353/mt. Month-end closing prices are often used for valuing portfolios.
February's PGPI increase outpaced gains in European and U.S. equity markets, but was on par with the stock market gain in Asia. Through February, the Dow Jones Industrial Average (DJIA) posted a 2.5% gain while the London Stock Exchange Index (FTSE) gained 3.3%. The Nikkei 225 climbed 10% during the month.
To access a summary of the February performance of each of the seven key petrochemicals included in the PGPI, visit this link: http://www.platts.com/newsfeature/2012/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 Platts Petrochemical Alert, a real-time news service, 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.
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