LONDON (ICIS)--European ethylene contract cracker margins have fallen week on week amid a substantial rise in feedstock costs, according to ICIS margin analysis on Tuesday.
In the week to 19 August, euro-denominated naphtha costs rose by about 8% while liquefied petroleum gas (LPG) feedstock costs increased by 9%.
Contract cracker margins based on naphtha fell by about 9% to their lowest value since mid-July, mitigated in part by a 2% increase in co-product credits.
Spot naphtha-based cracker margins dropped 11% to their lowest value since early July – spot dollar-based ethylene prices were unchanged but the euro was about 1% stronger week on week, so this also negatively impacted the spot margin.
The fall could have been more if not for a 3% increase in co-product credits.
LPG-based contract margins fell 7% to their lowest value since the end of June; the drop was offset by a 2% rise in co-product credits.
Additional reporting by Tracy Dang.
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