21 November 2013 16:19 [Source: ICIS news]
LONDON (ICIS)--European naphtha was trading $60/tonne cheaper than alternative petrochemical feedstock propane on Thursday, a record price gap for 2013, increasing its advantage as a petrochemical feedstock for producers, industry sources said.
Traditionally, naphtha has traded cheaper than propane during the year end as heating demand for propane rises during winter.
From January to October 2013, naphtha was on average $109/tonne more expensive than propane, but the spread began reversing in favour of naphtha in mid-November.
Naphtha was assessed at $932-933/tonne CIF (cost, insurance & freight) NWE (northwest Europe) on Thursday morning.
The naphtha differential to ICE Brent crude oil futures, or the crack spread, continues to set new record highs on the back of support from the propane price hike, trading at minus $3.35/bbl on Thursday afternoon.
A number of European petrochemical producers are able to switch between naphtha and propane, which is a liquefied petroleum gas (LPG).
The feedstocks are used to produce ethylene, propylene and other widely-used petrochemicals in Europe.
($1 = €0.75)
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