Global cost of auto petchem raw materials hits 13 month high
LONDON–The worldwide cost of petrochemical raw materials in an average automobile is at a 13-month high, analysis of the Global ICIS Basket of Automotive Petrochemicals (IBAP) showed on Tuesday.
The September Global IBAP rose by $7.01/tonne of total vehicle weight (TTVW) in September – an month-on-month increase of 2.5%.
Rises in the Europe and US IBAP were predominantly the result of higher polypropylene (PP) costs. PP is the most used plastic in automotive production, representing more than a quarter of the plastic used in an average automobile – although percentages vary from model to model.
The rise in PP prices was the result of an increase in the monthly monomer contract, despite weaker demand. Price rises in the US were also the result of feedstock cost increases.
In China, price rises were more evenly spread, with all prices rising except for PE and base oils. Price rises in September were the result of traditional trading patterns which typically see restocking following the August holiday lull.