Euro cracker margins rebound to peak 2011 levels

08 August 2011 16:26  [Source: ICIS news]

LONDON (ICIS)--European contract cracker margins based on naphtha feedstock have jumped €172/tonne ($246/tonne) on a combination of weaker upstream prices and a €30/tonne increase in the ethylene contract price, according to ICIS margin analysis on Monday.

A 6% decrease in euro-based naphtha costs in the week ending 5 August on the back of the crude oil price drop and poor demand from petrochemicals, together with the higher August ethylene contract price, took the margin to €626/tonne.

The average peak monthly margin to date stands at €667/tonne for June and €603/tonne for May.

Contract margins had dropped significantly in July. Poor demand and burgeoning supplies had led to a €95/tonne reduction in the July contract price, but soon after the settlement, naphtha feedstock prices firmed.

The ethylene contract price settled for August at €1,120/tonne FD (free delivered) NWE (northwest Europe). Part of the producers' argument for an increase was to alleviate the pressure on margins.

Spot margins gained €103/tonne despite softer spot ethylene and co-product butadiene prices.  

($1 = €0.70)

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By: Nel Weddle
+44 20 8652 3214

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