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Platts Global Petrochemical Index September 2013

Global Petrochemical Prices Rose Nearly 2% in September October 2013

Petrochemical Prices Were Up 2.3%

• LONDON, October 6, 2013 - Prices in the $3-trillion-plus global petrochemicals market rose 1.9% in September to $1,388 per metric ton (/mt), the fourth consecutive month of price gains, according to the monthly Platts Global Petrochemical Index (PGPI) report released today, coinciding with the European Petrochemical Association (EPCA) annual meeting in Berlin. 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, the PGPI data showed petrochemical prices were up 2.3% from the September 2012 average of $1,357/mt.

• 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.

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Platts September Index

Platts Petrochemical Alert

Olefins - PGPI, posted a $31/mt rise in September to $1,292 /mt

Olefins – a group of hydrocarbon compounds which are the building blocks to many petrochemicals – had mixed fortunes, with a 4% year-over-year decline in ethylene prices, while propylene prices rose 13% year over year.

• “Global propylene prices were supported by the €110/mt ($141/mt) rise in European contract prices over the last four months, due in part to stronger polypropylene demand, planned or unscheduled plant outages, and persistently strong prices of naphtha, the main feedstock for steamcracker operators in Europe and Asia,” said Shahrin Ismaiyatim, Platts editorial director, petrochemicals analytics. Commenting from the sidelines of the EPCA, Ismaiyatim went on to say, “However, early indicators of October price patterns are indicating that the rise in propylene prices may have reached its peak.”

• Ethylene, the first olefin component in the PGPI, posted a $31/mt rise in September to $1,292 /mt, representing a 2% gain from July. Meanwhile, propylene prices averaged September at $1,367/mt, up $18/mt or 1% month over month.

•

POLYMERS - Low-Density Polyethylene Index climbed 2%

• Prices of polymers – the raw material for plastics – continued to post modest gains in September as Chinese buyers restocked their inventories ahead of the week-long holiday in October. In addition, polyethylene suppliers to Latin America cited optimism in the polymers markets ahead of Brazil decreasing its polyethylene import tariff from 20% to 14% from October 1.

• Meanwhile, China’s General Administration of Customs showed August imports of low-density polyethylene were up 6% from July, while imports of other grades of polyethylene showed decreases.

• The Platts Global Low-Density Polyethylene Index climbed 2% in September to $1,663/mt, up from $1,628/mt in August. The Platts Global Polypropylene index, the second polymers component in the PGPI, was also up 2% in September to $1,618/mt, from 1, 588/mt in August.

• Petrochemical prices in September performed in line with the global equity markets. The Dow Jones Industrial Average (DJIA) closed September at 15,129.67, up 2% from August, while the London Stock Exchange Index (FTSE) was up a marginal 0.3% at 6462.20. The Nikkei 225 was up a strong 8% in September to 14,455.80.

Benzene Price Index

• The chart above shows the daily end-of-day Platts Global Benzene Price Index price in red and also displays the 20-day moving average in blue.

• Global benzene prices rose a further 3% in September to $1,303 per metric tons (/mt), up from $1,267/mt in August, according to the just-released PGPI data expressed as a monthly average.

• Strong styrene prices, a downstream product of benzene, continued to test year-high prices especially in Asia, where supply tightness was caused by a confluence of planned and unplanned plant outages.

Toluene Price Index

• The chart above shows the daily end-of-day Platts Global Toluene Price Index price in red and also displays the 20-day moving average in blue.

• Toluene, an aromatic petrochemical included in the PGPI, saw a 2% price increase in September to $1,162/mt. This is up from the August level of $1,136/mt, according to the just-released PGPI data expressed as a monthly average.

• On a year-over-year comparison, the September 2013 price was 8% less than the September 2012 price of $1,266/mt, as the weak demand in the U.S. was exacerbated by a rise in supply from Asia and Europe.

Paraxylene Price Index

• The chart above shows the daily end-of-day Platts Global Paraxylene Price Index price in red and also displays the 20-day moving average in blue.

• Paraxylene prices fell 1% in September to an average of $1,437/mt, according to the just-released PGPI data expressed as a monthly average. This compares to the August average of $1,447/mt.

• The decline in September prices was likely attributable to the low production margins due to weak downstream markets, as well as the start-up of a mega paraxylene production plant in China.

Polypropylene Price Index

• The chart above shows the daily end-of-day Platts Global Polypropylene Price Index price in red and also displays the 20-day moving average in blue.

• Prices for the second polymer component of the PGPI – polypropylene (PP) – climbed 2% to $1,618/mt in September, according to the just-released PGPI data expressed as a monthly average.

• This was up from $1,588/mt in August. The price increase was likely attributed to PP producers managing their production margins following the rise in the price of feedstock propylene.

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LDPE Price Index

• The chart above shows the daily end-of-day Platts Global Low-Density Polyethylene Price Index price in red and also displays the 20-day moving average in blue.

• Low-density polyethylene (LDPE) prices increased 2% in September to $1,663/mt, in line with the rise in ethylene, its raw input.

• This is compared to an August price of $1,628/mt, according to the latest PGPI data expressed as a monthly average. Re-stocking of LDPE inventory in China supported the price rise.

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Ethylene Price Index

• The chart above shows the daily end-of-day Platts Global Ethylene Price Index price in red and also displays the 20-day moving average in blue.

• Global ethylene prices climbed 2% in September to $1,292/mt, according to the just-released PGPI data expressed as a monthly average. This was up from $1,260/mt in August.

• Ethylene prices continued to be supported by firm naphtha prices. Naphtha is used primarily in Europe and Asia to produce ethylene, and naphtha prices in both continents were up 2% month over month.

PolymerUpdate – Platts Polymer Report

Propylene Price Index

• The chart above shows the daily end-of-day Platts Global Propylene Price Index price in red and also displays the 20-day moving average in blue.

• Prices of propylene, the olefin raw input used in the manufacturing of polypropylene, rose 1% on a month-over-month basis in September to $1,367/mt, according to the just-released PGPI data expressed as a monthly average.

• This compared to an August level of $1,349/mt and was likely attributed to stronger European contract prices, supported by stable derivatives demand.

PGPI is anchored by Platts’ robust and long-established price assessment methodology

• 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, consult Platts Media Center. For more information on petrochemicals, visit the Platts website at www.platts.com.

Ethylene and co-products share in cracker margins

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Share (%) of margin spread by olefin

19

64

48 45

48

54

18 21

19 16

18

9

12

8

13

17

9

19

28

23

11

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013

Ethylene

Propylene

Benzene

Butadiene

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