Q3 showed no real improvement in European cracker operating rates (OR%). As the chart shows, based on APPE data, these remained at 82% for the Q1 - Q3 period. Of course, this is much better than the 76% OR% seen in 2009, but it would not normally be a matter for celebration.
However, the 'silver lining' identified by the blog back in August has continued to support margins. EU refinery operating rates remained low because of the increasing gasoline surplus. And so there was little pressure to increase cracker operating rates. In addition, there were further force majeures, helping to restrict over-supply.
However, the latest IEA data on refinery OR% indicates these are now rising. This would make sense, as Europe's refineries are primarily diesel-driven, and so rates usually increase as winter approaches. The scale of refinery operation dwarfs that of petchems, so producers will have to remain on alert for relatively small changes to have a major impact on their business.
But for the moment, the silver lining remains very welcome.