Europe contract, spot cracker margins fall on higher feedstock

LONDON (ICIS)–European contract and spot cracker margins have fallen considerably week on week, almost reversing all of last week’s gains, on a combination of naphtha and liquefied petroleum gas (LPG) price increases and a stronger dollar, ICIS margin analysis showed on Monday.

In the week to 9 September, euro-denominated naphtha and LPG costs rose by 12% and 5% respectively.

This led to a drop of 17% for both naphtha-based contract and spot cracker margins. The declines were slightly offset by a 1% gain in co-product credits.

Contract cracker margins based on LPG meanwhile, fell by 5%, with co-product credits lending 1%.

LPG contract margins are currently holding a €70/tonne advantage over naphtha.

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