Global petrochemical prices slumped by 4 per cent in October

The $3 trillion-plus global petrochemical industry witnessed a 4 per cent fall in October as upstream energy prices continued their downward spiral. Petrochemical prices fell from $1,384/mt in September to $1,324/mt.  On a year-on-year basis, petrochemical prices slipped 2 per cent from the same month in 2013.

Prices have fallen 10 per cent since October, around $8/mt a day, after a short period of price rise. The steep decline in prices comes at a time when crude and naphtha prices have also been falling. Brent prices declined by 10 per cent in October, while naphtha prices fell by 15 per cent.

Petrochemicals are used by a large number of industries, including construction, pharmaceuticals, aviation, electronics and are used to make plastic, nylon, rubber and other consumer goods.

Prices of olefins, hydrocarbon compounds that function as the building blocks to petrochemical products used to produce consumer products, also declined in October. Ethylene prices slumped by 6 per cent to $1,324/mt, while propylene prices fell by 1 per cent to $1,311/mt.

Polyethylene also slipped by 2 per cent in October and polypropylene prices slipped by 1 per cent during the same period.

Aromatics are scented hydrocarbons with benzene rings. Prices of this compound fell steeply in October. Benzene prices declined by 7 per cent to $1,181/mt, while toluene prices dropped 8 per cent to $991/mt and paraxylene fell by 12 per cent to $1,603/mt. The paraxylene market registered the largest fall.

The falling petrochemical prices were accompanied by a sluggish global equity market. The Nikkei 225 and Dow Jones Industrial Average saw a rise of 2 per cent in October and the London Stock Exchange Index fell by 2 per cent during the same period.

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