Global petrochemical prices continue to fall

, a benchmark basket of seven widely used petrochemicals, experienced its largest month-on-month price drop in percentage terms since November 2008. At that time, at the start of the global economic crisis, prices fell 38%.

June's decline follows an 11% drop in the monthly average in May and is down 20% from the year-ago June 2011 average. Platts noted that across the globe, petrochemical prices have followed energy prices lower. Brent crude oil prices most recently peaked at $126/bbl in March, before falling as low as $89/bbl during the third week of June.

During that same period, the Platts naphtha index fell by 35%, having a big impact on olefin production. This has a larger influence on geographic locales, like Europe, which rely on the crude oil stream for petrochemicals compared to the natural gas stream, which dominates North America's feedstock chain.

Jim Foster, Platts senior editor of petrochemical analytics, said in a release the price drop in crude oil and naphtha that began in March triggered a knock-on decline in global olefins prices, with propylene and ethylene both falling about 30% since mid March.

All seven components of the PGPI were lower in June on a month-on-month, average monthly price basis. Ethylene showed the largest loss, falling 21% from May. Paraxylene, used in the production of polyethylene terephthalate, was down 16% compared to May, while propylene prices fell 14%. In the polymer markets, low-density polyethylene (LDPE) values fell 13% and polypropylene prices were down 10%. In the aromatic chain, the global toluene index in June fell 8% and benzene values fell two percent.