Crude oil and gasoline aren’t the only petroleum products that are seeing price drops. The market for petrochemicals such as benzene, xylene, and styrene have all fallen by about 25% since the Spring, mostly due to lack of demand from China. When E.I. du Pont de Nemours and Co. (NYSE: DD) lowered its fourth-quarter guidance last week, the announcement put an exclamation point on the price drops.
US Gulf Coast styrene, for example, has fallen from a high of more than $1,600/metric ton in May to arount $1,200/metric ton in late November. The Financial Times reports that naphtha prices in November fell to a low of $1,162/metric ton, down 25% from the May highs.
The falling prices are ascribed to lower demand from light manufacturers and construction firms. Uncertainty about the future of the global economy has caused some firms to begin de-stocking, which was given by DuPont as one of the reasons for its lowered guidance.
The FT cites an analyst at IHS Cera who believes that Chinese demand will pick up again in 2012. The country’s falling inflation rate and the recent easing of interest rates should help restore some demand for petrochemicals.
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