11 August 2008 15:57 [Source: ICIS news]
LONDON (ICIS news)--European cracker margins based on naphtha feed were at their highest level since February 2007, driven by gains in key olefins prices and supported by a 20% drop in naphtha values since its peak in early July, according to ICIS pricing analysis on Monday.?xml:namespace>
Contract cracker margins recorded a sharp increase of over €110/tonne ($164/tonne) in the week ending 8 August, as dollar-denominated naphtha prices fell by 8.4% on the close of Friday.
Margins would have been higher but for a strengthening of the US dollar versus the euro, which pulled margins down by around €55/tonne.
Spot naphtha margins were continuing to recover more strongly than contract, showing a €90/tonne advantage over contract.
Variable contract margins had moved into negative territory in June, when feedstock costs spiralled on the back of soaring crude prices and olefins prices were still languishing at unsatisfactory second-quarter contract levels.
This led cracker operators to cut production rates and change to cheaper alternative feedstocks where possible.
Open-spec spot naphtha cargoes were assessed in a $939-949/tonne CIF (cost, insurance and freight) NWE (northwest ?xml:namespace>
($1 = €0.67)
The weekly margin report for polyethylene (PE) in
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