PEP Review 89-1-2
Petrochemicals Price Behavior
Published: April 1990
We have gained new insights on the relationships between petrochemicals prices, production costs, and capacity utilization, by relating the results from three different facets of production cost analysis, namely:
- Cost component breakdowns-the breakdown/aggregation of costs into basic components
- Supply curves-plant-by-plant analysis of production costs
- Learning curves-analysis of cost variations over time.
In this review we outline how these approaches can be integrated to provide an improved framework for projection of market prices for petrochemicals, given a general economic and oil price scenario.