European cracker margins squeezed by higher feedstock costs

LONDON (ICIS)–Margins at European crackers fell week on week, squeezed by higher feedstock costs, ICIS margin analysis showed on Monday.

Operators using liquefied petroleum gas (LPG) saw a bigger fall in margins than producers using naphtha.

In the week to 09 October:

• Naphtha costs rose by 5%
• LPG values were up by 11%

Naphtha-based contract margins declined by 10%, co-product credits rose slightly:LPG-based contract margins fell 17%, co-product credits rose slightly:Contract margins by feedstock:Spot margins by feedstock:

In the week to 9 October, falling spot values and increasing feedstock prices weighed on spot ethylene margins, especially at LPG-based crackers which saw LPG prices increase sharply in line with a seasonal shift in demand.

Spot demand saw an improvement during the week, but issues at derivative plants persist.

Supply remains long although some cracker issues have been reported.

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