The ICIS Petrochemical Index (IPEX) plunged in April as the impact of the falling oil price and coronavirus-driven demand destruction slammed the sector.
The ICIS petrochemical index tracks the movement of 12 major petrochemicals and polymers: ethylene, propylene, butadiene, benzene, toluene, paraxylene (PX), polyethylene (PE), polypropylene (PP), styrene, polystyrene (PS), methanol and polyvinyl chloride (PVC) with the regional indexes weighted by capacity.
The global index stands at a level last seen in November 2003 and is just below that in January 2009.
Each of the regional components of the global index fell sharply month on month as petrochemical and plastic prices fell across the board. The index charts the largely contract and average monthly price movements of a basket of the 12 major petrochemicals and plastics.
Aromatics prices fell steeply and quickly in April as the falling value of naphtha worked its way through the regional markets. Petrochemicals prices are impacted by the drop in crude oil and the negative market sentiment of oversupply as coronavirus lockdowns across large areas of the globe hit downstream and end-use product demand.
“While there are some bright spots of increased demand for certain chemicals and plastics important for the protection of human health, the overarching price trend for petrochemicals and plastics is down due largely to oversupply,” according to Nigel Davis, Insight Editor at ICIS.
Some of the polymers have been least affected by the lockdowns although in terms of price, the drops for products such as polypropylene in the US and polystyrene in Europe were still in the 5-6% range.
“There were no price increases for products used to compile the IPEX in April,” adds Davis.
Note: Contracts yet to settle for April are: US paraxylene, US polyethylene, and Asia paraxylene.