Europe PP margins continue to slip on higher feed costs

HOUSTON (ICIS)–Europe integrated margins for domestic naphtha-based polypropylene (PP) continued to slip during the week ended 27 May on slightly higher feedstock costs, the ICIS margin report showed on Tuesday.

Margins for domestic naphtha-based PP inched lower by 0.15% as naphtha feedstock edged up. Co-product credits for material made from naphtha inched up 0.58%.

Integrated domestic PP margins based on propane dehydrogenation (PDH) slipped 0.53% on an increase in propane feedstock costs.

Standalone domestic PP margins remained unchanged, while standalone spot PP margins and those for buying spot propylene and selling domestic PP dropped by nearly 6%.

Meanwhile, the euro fell 0.62% versus the US dollar. Naphtha feedstock is priced in US dollars, so weakness in the euro has a negative effect on margins, while a strengthening euro has a positive effect.