European ethylene margins slip as oil prices rise

C2 margins.jpgThe excellent ICIS European margin report for ethylene shows an interesting picture this week.

The chart above compares contract margins based on naphtha (red line) and LPG (yellow line) feedstock. Both have been slipping since September, when they peaked at €398/t and €357/t respectively. This week, they are over 40% lower, at €232/t and €208/t.

This highlights the difficulty of passing through rising crude oil prices when demand growth is slow. As ICIS note, last week’s $22/t rise in naphtha led to a €48/t fall in total margin.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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