Euro cracker margins dip, Apr margin still highest since June '12

29 April 2013 15:07  [Source: ICIS news]

LONDON (ICIS)--European contract cracker margins based on naphtha feedstock have fallen again week on week because of a 2.9% increase in costs, but the average margin for April remains at its highest level since June 2012, ICIS margin analysis showed on Monday.

In the week ending 26 April, contract naphtha margins fell by about 6% following a $20/tonne (€15/tonne) rise in naphtha prices and a slightly stronger dollar. The drop was cushioned slightly by a 0.9% increase in co-product credits.

The average contract margin for April was €114/tonne higher than that for March.

Spot naphtha margins meanwhile fell by almost 30% because of the higher feedstock costs as well as a continued slip in spot ethylene prices. Spot ethylene prices have been softening because weak demand from derivative markets is limiting spot buying interest.

Conversely, contract margins based on liquefied petroleum gas (LPG) rose by €70/tonne, benefitting from a 4.7% fall in feedstock costs. In the week ending 26 April, LPG prices weakened by more than $35/tonne.

The margin average for LPG is also its highest level since June 2012 and is showing a slight advantage over naphtha margins.

LPG v N 26 Apr 2013

Contract v Spot 26 Apr 2013

($1 = €0.77)

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By: Nel Weddle
+44 20 8652 3214

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