Plastics, chemical prices rose in August

Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals, reached $1262/tonne in August, up from $1175/tonne in July, which was itself, 16% higher than June. Jim Foster, Platts senior editor of petrochemical analytics, cited stronger oil and naphtha prices as the impetus for the increase. "That trend was most obvious in the olefins markets," Foster said in a release, "with both ethylene and propylene seeing a climb in production costs due to higher naphtha prices."

The market also anticipated a demand increase for other petrochemicals, mostly aromatics, with that sentiment boosting prices along with the higher production costs.  

Platts said renewed interested in styrene and polystyrene was expected to provide increased demand for their chemical precursor, benzene, however, that chemical was the only product in the PGPI to lose value in August, sliding 3% to $1245/tonne.

On a seasonal basis, an anticipated paraxylene demand increase, as garment manufacturers use more polyester ahead of the winter clothing season, is expected to boost prices in that segment.

Six of the seven PGPI components rose in August, with the largest gain in ethylene, which jumped 15% to $1228/tonne. The PGPI tracks daily price assessments of the physical spot market for ethylene, propylene, benzene, toluene, paraxylene, low-density polyethylene, and polypropylene.