LPG cracker margins fall 31% losing advantage over naphtha

18 November 2013 13:27  [Source: ICIS news]

LONDON (ICIS)--European contract cracker margins based on LPG (liquefied petroleum gas) feedstock have fallen by 31%, losing the advantage over naphtha feedstock for the first time since early August, according to ICIS margin analysis on Monday.

In the week ending 15 November, LPG costs rose 6.1% because of an $85/tonne (€63/tonne) and $40/tonne increase in butane and propane prices respectively.

Cracker margins: contract vs spot prices, 15 November 2013

European contract cracker margins based on naphtha feedstock were up slightly as a 0.9% boost in co-product credits outweighed a 0.3% rise in naphtha costs. Co-product credits rose on higher pygas (pyrolysis gasoline) and raffinate 1 values. An $11/tonne rise in naphtha costs was largely eliminated by a 1% weakening of the dollar.

The naphtha contract margin is showing a €56/tonne premium over that of LPG.

Cracker margins: LPG vs Naphtha feed, 15 November 2013

Spot margins based on naphtha feedstock fell by €17/tonne. Spot dollar-based ethylene prices were slighly weaker but combined with the weaker dollar, this reduced ethylene’s euro-based value by 1.4%. Co-product credits were flat.

($1 = €0.74)

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By: Nel Weddle
+44 20 8652 3214

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