27 August 2013 22:29 [Source: ICIS news]
LONDON (ICIS)--Ethylene cracker contract margins based on naphtha have hit their lowest level since a year ago because of the firming trend in upstream feedstock costs, according to ICIS margin analysis.
Contract margins softened by €23/tonne ($30.67/tonne) in the week ending 23 August as euro-based feedstock costs increased by 1.2% while naphtha prices firmed by $16/tonne. The impact was lessened slightly by a weakening of the US dollar against the euro.
Feedstock costs are the highest since mid-March.
Co-product credits edged up by 0.3%, which helped to mitigate slightly the margin fall.
Spot margins (naphtha-based) also dropped by the same amount as seen on contract margins because of higher feedstock costs.
Co-product credits rose by 0.8%, mainly because of higher spot butadiene prices. Ethylene dollar-based spot prices were flat, but lower in euro terms.
Contract margins based on liquefied petroleum gas (LPG) rose slightly amid some feedstock softening in euro terms. The weaker dollar outweighed a $2/tonne rise in LPG prices.
LPG margins have more than a €100/tonne advantage over naphtha margins.
($1 = €0.75)
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