European ethylene spot prices soften in 6 weeks, as feedstock naphtha falls

17-Jan-14

Ethylene spot prices in Europe have softened marginally for the first time since December 6 as feedstock naphtha prices fell, sources said, as per Platts. Ethylene was assessed at Eur 1000/mt (US$1362) FD NWE Wednesday, down Eur 7.50/mt. Naphtha was assessed at US$912.25/mt CIF NWE, compared with US$948.50/mt on December 31. Deals were heard for FD NEW ethylene at Eur 980-1000. The decline in ethylene prices was cushioned by tight NWE supplies caused by production issues reportedly at Total’s Gonfreville and Feyzin crackers. The French crackers were shut down during a strike that began in mid-December, affecting all five of Total's French refineries, taking out 1 million bpd of refining capacity. The Feyzin cracker restarted in early January, but was not operating at full capacity. It was unclear whether the Gonfreville cracker had restarted. The European naphtha market has weakened on the back of a weaker Asian market as traders eyed high arbitrage arrivals over February and March. Limited regional demand in Northwest Europe has also pressured the market as pockets of gasoline blending demand and demand from petrochemical end users was not enough to support values. Meanwhile, propylene held steady at Eur 1130/mt FD NWE Wednesday, with tight supplies offsetting the fall in naphtha. The propylene spot price has been on uptrend since December 13, when it was assessed at Eur 1067.50/mt FD NWE. Sources reported improved cracker operating rates in January compared with December, at 80-85% as naphtha prices eroded. December rates were pegged at 75%.