04 June 2012 00:00 [Source: ICB]
The spread has reached a peak of almost €490/tonne - the largest since December 2008, when spot margins collapsed to an average €223/tonne and contract margins (based on a quarterly ethylene contract price) soared to almost €1300/tonne, yielding a difference of almost €1,070/tonne, the biggest seen this millennium.
Contract margins rose in the last week of May, with naphtha feedstock costs - in euro terms - falling by almost 20% from their peak in March and the ethylene contract price in April just below its all time high of €1345/tonne.
Spot margins have averaged around €360/tonne for the month.
HINTS OF CHANGE
However, there is a sign of the gap closing, with the June ethylene contract price settled at a three-digit price drop, down by €120/tonne to €1,205/tonne. This significant decrease largely reflects reduced demand and weak upstream crude oil and naphtha markets.
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