As naphtha approaches US$1000/ton mark, European crackers brace themselves for diminishing margins

21-May-08

Propped by record high oil prices, as naphtha approaches the US$1000/ton mark, European cracker operators have braced themselves for a dent in margins. In a bid to recover from diminishing margins, they plan to cut back operating rate and increase Q3 prices. Despite admitting that margins for the average naphtha cracker were being squeezed heavily, producers were not able to confirm any reductions for economic reasons. A reduction in capacity currently, is not possible as the producers have to fulfil Q2 commitments.