Europe April cracker margins significantly up year on year
Nel Weddle
08-May-2017
LONDON (ICIS)–Average European contract and spot cracker margins were significantly higher in April 2017 when compared with the same period a year earlier, ICIS margin analysis showed on Monday.
Contract naphtha-based cracker margins increased by 52% year on year, while those based on liquefied petroleum gas (LPG) rose by about 37%.
Primarily these gains reflect the difference in the reference contract price – €1,050/tonne in April 2017 – compared with €870/tonne in 2016.
Naphtha costs meanwhile were in the low €300s/tonne CIF (cost, insurance and freight) in April 2016 but were rather more volatile in April of this year, rising to the mid-€400s/tonne before settling back to the high €300s/tonne.
However spot naphtha-based cracker margins saw the biggest change, almost doubling in April 2017 when compared with April of last year.
According to ICIS analysis, the average spot cracker margin was 88% higher year on year, reflecting the tight supply and demand conditions in March-April which led to spot prices soaring – and being sustained – above the prevailing contract price for the first time since a brief period in May 2016.
Follow Nel Weddle on Twitter @nelweddleICIS
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