08 July 2013 16:56 [Source: ICIS news]
LONDON (ICIS)--European ethylene contract and spot margins (naphtha based) fell significantly in the week ending 5 July on firmer upstream naphtha costs, which were further exacerbated by a stronger US dollar, according to ICIS margin analysis on Monday.
Substantial losses in co-product values were also a contributory factor for the drop in naphtha-based contract margins.
Contract margins (naphtha based) slipped by €147/tonne ($188/tonne), as Euro-denominated naphtha costs rose by 5.7%, following a $36/tonne increase in the naphtha price and a 1.4% stronger dollar. The ethylene price was unchanged following the rollover from June to July contracts.
Co-product credits were down by 1.7% on €250/tonne and €67/tonne falls in the contract prices of butadiene (BD) and benzene, respectively.
Spot margins (naphtha based) were down by €91/tonne because of the higher naphtha costs. The fall was despite a 1.1% rise in co-product credits, with higher pyrolysis gasoline (pygas) values outweighing lower spot prices of BD and benzene.
Contract margins based on liquified petroleum gas (LPG) dropped by €75/tonne, with the Euro-denominated cost of LPG rising by 4.3% on a $23/tonne rise in the LPG price. Co-product credits fell by 1.2%. LPG has regained the advantage over naphtha, at €42/tonne.
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