The steep decline in European naphtha prices has failed to prompt a significant rise in spot demand from regional petrochemical producers, as the cost of feedstock alternative propane tracks and exceeds losses in naphtha.
European naphtha's assessed spot price premium to propane widened by $42.50/t in 2014, up to $92.50/t. Declining crude costs, lower by 53pc to $50.11/bl year on year, in addition to surpluses from olefin cracking, has pressured prices for both feedstocks. Further losses have been capped by relatively strong overseas demand for European plastic products derived from both ethylene and propylene, as European exports remain supported by a weakening euro.
Outright naphtha prices, assessed yesterday at $381/t were lower $544/t for the year, while spot propane currently trades at $288.50/t, down by 18.6pc to 76pc of the naphtha cost from a year earlier.
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