Europe naptha cracker Q3 margin average down 38% from Q2

30 September 2013 15:32  [Source: ICIS news]

LONDON (ICIS)-The average European naphtha contract cracker margin for the third quarter sank by 38% compared with the second quarter, according to ICIS margin analysis published on Monday.

The margin average for the third quarter was assessed at €334/tonne ($451/tonne) compared with €536/tonne in the second quarter. However, this is slightly higher – by €24/tonne – than the same period in 2012.

In the week ending 27 September, contract margins increased slightly as euro-based feedstock costs fell by 1% following a $8/tonne decline in naphtha prices. The dollar was only slightly weaker against the euro. Co-product credits fell by 0.9%.

Spot margins based on naphtha feedstock were down by €16/tonne as a 2.2% fall in co-product credits and a fall in ethylene spot prices outweighed the lower feedstock costs. The average spot margin for the third quarter was €107/tonne lower – by about 44%  - than in the previous quarter.

Contract margins based on liquefied petroleum gas (LPG) slipped by €4/tonne mainly because of a 0.8% fall in co-products credits. Feedstock costs were virtually flat.

The average third quarter margin LPG feedstock showed a €64/tonne premium over the contract naphtha cracker margin for the same period.

The ICIS margin model is generic and does not refer to any individual operation because of variation among crackers. It can be mainly used as a reference in terms of step-change rather than in absolute values.

Europe contract vs spot naphtha margins Europe LPG vs naptha cracker margins

($ 1 = €0.74)

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By: Nel Weddle
+44 20 8652 3214



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