LONDON (ICIS)--European contract cracker margins based on naphtha feedstock have risen to their highest level since June 2013 on the third consecutive drop in feedstock costs, according to ICIS margin analysis on Monday.
In the week ending 11 July, contract cracker margins were up about 6% on a 1.4% decline in euro-denominated naphtha costs. Naphtha prices fell $14/tonne but the dollar-euro exchange rate was virtually unchanged.
The contract cracker margin would have been more if not for a 0.6% fall in co-product credits because of weaker pygas (pyrolysis gasoline) and raffinate 1 values.
Spot margins based on naphtha were up by about 8% as the lower feedstock costs outweighed a $15/tonne fall in spot ethylene prices and 0.5% lower co-product credits.
Contract cracker margins based on LPG (liquefied petroleum gas) increased by about 3% on a 1.5% drop in LPG prices. Co-product credits were down by 0.5%.
The margin advantage of LPG versus naphtha has shrunk to €162/tonne.
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