Naphtha prices in Europe dip below US$400/mt, cracker margins increase

07-Jan-15

European naphtha prices fell below US$400/mt CIF NWE for the first time since April 2009, in line with crude prices, as per Platts. European naphtha was assessed at US$389.50/mt CIF NWE Monday, pushing European spot cracker margins to US$666/mt, near all-time highs. Naphtha prices are at their lowest point in nearly six years- CIF NWE naphtha cargo on March 16, 2009 was assessed at US$380.25/mt, according to Platts data. Cracker margins have swelled because the fall in olefins prices has been far less dramatic than the decline in naphtha. Ethylene, propylene and butadiene spot prices were assessed on Monday at Eur 774/mt (US$921/mt) FD NWE, Eur802/mt FD NWE and Eur600/mt FD NWE respectively. Trading activity in the naphtha market post Christmas holidays saw at least a few barges exchanging hands, the paper market was little changed from the very weak levels of the previous week. "The naphtha market still feels a bit long and with the contango it's quite hard to incentivize people to get naphtha out of tanks unless there is a good premium," a broker said.