Petrochemical prices surge 10 percent on high oil prices
Prices in the $3-trillion-plus global petrochemicals marketplace climbed 10 percent in February to $1,401 per metric ton (per 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 percent increase, the February surge pushed the PGPI to nearly even with the February 2011 average of $1,423 per 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 percent during the month to more than $120 per barrel. The West Texas Intermediate crude price rose 9 percent to $107 per 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.