02 August 2013 20:55 [Source: ICIS news]
HOUSTON (ICIS)--NOVA Chemicals's Q2 olefin margins fell year on year because of higher prices for natural gas and lower prices for butadiene (BD), the CEO said on Friday.
For its operations in western Canada, NOVA's feedstock costs for its crackers in Joffre, Alberta, are driven by prices for natural gas, said Randy Woelfel, NOVA CEO. Woelfel made his comments during an earnings conference call.
Natural gas prices during the second-quarter were well above those during the same quarter in 2012, Woelfel said.
"That of course pulls directly through to the cost basis we have on the feedstock and also affects us, of course, in terms of operating cost for energy," he said. "I think that's the principle issue in the west."
In the east, 20-25% of the feedstocks are heavy at NOVA's Corunna cracker in Ontario, he said. Heavier feeds produce a larger proportion of heavier co-products such as propylene and BD.
Margins at the Corunna cracker fell because of the sharp decline in BD prices, Woelfel said.
Average prices fell to 74 cents/lb ($1,631/tonne, €1,240/tonne) FOB (free on board) US Gulf (USG) in June, down from 153.50 cents/lb in April 2012, according to ICIS.
"Butadiene pricing still continues to be on a downward trend, hard to say if we've reached bottom there, but certainly it has been moving down," Woelfel said.
|Date||Butadiene FOB USG Contract Price Assessment Contract Month : Contract Period||Butadiene FOB USG Contract Price Assessment Contract Month (Avg.) : CTS/LB|
($1 = €0.76)
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