Corrected: Europe naphtha cracker margins down 6.14% on Nov ethylene fall

05 November 2012 15:26  [Source: ICIS news]

Correction: In the ICIS story headlined "Europe naphtha cracker margins down 3.68% on Nov ethylene fall" dated 5 November 2012, please read the headline as ...down 6.14%... instead of ...down 3.68%... In the first paragraph please read ...have fallen 6.14%... instead of ... have fallen 3.68%. In the fifth paragraph please read ...5.4% rise... instead of ...5.4% fall.... A corrected story follows. 

LONDON (ICIS)--European contract cracker margins based on naphtha feedstock have fallen 6.14% on the back of the €15/tonne ($19/tonne) drop in the November ethylene contract price and a 0.6% weakening in co-product credits, according to ICIS margin analysis on Monday.

In the week ending 2 November, euro-based naphtha costs were stable as a $6/tonne drop in naphtha prices was offset by a 0.7% strengthening of the dollar. Co-product credits were also negatively impacted by lower propylene and butadiene contract prices for November.

At €382/tonne the margin average for November so far is 7.5% down from October’s and almost half that of the 2012 margin peak in the second quarter.

Spot margins were down by €42/tonne as spot ethylene prices fell by $50/tonne, although the stronger dollar cushioned the impact. Spot co-product credits were down by 0.6% because of softer propylene prices.

The worst margin picture was for liquified petroleum gas (LPG) feed. The contract margin plunged by €130/tonne to its lowest level  - just €18/tonne - since December 2010. This was because of a 5.4% rise in euro-based LPG prices, the drop in the November ethylene contract price and a 1% fall in co-product credits.

The ethylene contract price for November was settled last week at €1,275/tonne FD (free delivered) NWE (northwest Europe) because of a modest drop in feedstock costs and soft downstream fundamentals.

Europe cracker margins

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($1 = €0.78)

By: Nel Weddle
+44 20 8652 3214

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