LONDON (ICIS)--European contract and spot cracker margins have fallen week on week for a third time on the back of gains in naphtha and liquefied petroleum gas LPG, ICIS cracker-margin analysis showed on Monday.
In the week to 7 October, euro-denominated costs for naphtha and LPG rose by 8% and 11% respectively, aided by a 1% stronger dollar against the euro.
Contract naphtha-based margins fell by 8% to its lowest weekly value since mid-May, despite a 5% gain in co-product credits.
The average contract cracker margin based on naphtha feedstock for September showed a 4% decline compared with the average for August.
Spot naphtha-based margins fell by 10% to its lowest weekly value since mid-June, despite a 5% gain in co-product credits.
The September average spot margin based on naphtha feedstock was around 2% under that for the month before.
Contract cracker margins based on LPG feedstock fell by 7% week on week, its lowest weekly value since March. Co-product credits were up by 5%.
The average LPG-based contract margin for September showed the greatest month-on-month decline compared with naphtha-based margins, falling by 8% when compared with August.
Despite the margin losses, historically, cracker margins remain at a high level.
* yearly margin averages to date in €/tonne
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