Copyright © 2010 Reed Business Information Limited. ICIS Pricing is a member of the Reed Elsevier plc group.
15th February 2013
Editor Nel Weddle, nel.weddle@icis.com
CONTRACT PRICES
Click for Price History
FD NWE FEB EUR/TONNE n/c
NOTE: for full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click
on “methodology”.
Europe ethylene market remains balanced on imports
versus domestic output constraints
The European ethylene market remains balanced, as output
constraints,both planned and a few ongoing and new
unplanned issues, are being offset by sizeable import volumes
ex-Asia and ex-US, which have already been booked.
Consumption is satisfactory, but not exceptional. There is
some talk that polymer demand is weaker when compared
with the non polymer sector, although one player in the non-
polymer sector suggested that its demand was also slightly
less when compared with the same period last year.
Ethylene derivative players continue to struggle with the high
prices,with European ethylene the highest out of all the
regions, which is proving even more challenging amid the
ongoing fragile economic climate, of which some downstream
sectors are more resilient than others.
In terms of MCP discussions for March, it is deemed too early
in the month to have any precise indications, as players
continue to monitor feedstock and olefin supply/demand
developments.
The general expectation is that producers are likely to push for
an increase on the March contract price, based on higher
production costs and the need to recoup losses for cracker
margins, along with output constraints – both planned and
unplanned.
Precise targets were not yet forthcoming, although one
producer suggested that the increase target would not be
limited in magnitude.
One buyer said it reluctantly acknowledged that a price
increase would be likely if upstream costs were to remain high
based on contract margin recovery. The sourcesaid it is
concerned that if the European ethylene contract price were to
go up significantly over the next few months, it could further
jeopardise downstream demand which remains modest.
A second consumer said it would push for price stability for the
sake of downstream demand, irrespective of feed
developments.
Upstream
Crude oil futures had another mixed week. Initially the NYMEX
benefited from a prediction by a couple of Wall Street banks
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Ethylene (Europe)
Price Range One year ago US CTS/LB
1275.00-1275.00 n/c 1219.00- 77.22-77.22
1219.00
that the negative WTI-Brent spread would shrink dramatically
in the second quarter, which led investors to just pile the
money in.
The weekly US stock figures showed a smaller build on crude
than forecast, plus an unexpected draw on gasoline and a
much larger draw on distillates, which also gave support to the
US benchmark.
However, at the end of the week, disappointing global
economic data encouraged a bout of profit-taking ahead of the
US holiday weekend and both benchmark grades plunged
sharply.
On Friday afternoon, the April ICE Brent contract was trading
around $116.60/bbl, down from the previous week’s close of
$117.85/bbl. March NYMEX WTI was trading around
$95.40/bbl, down from the previous week’s close of
$95.72/bbl.
The northwest Europe naphtha market remains tight as a
result of an ongoing open arbitrage to Asia and gasoline
blending requirements for naphtha persisting at healthy levels.
This week’s range of $978-1,009/tonne CIF NWE compares
with $962-1,005/tonne CIF NWE last week.
Downstream
European polyethylene demand is weak. Recent figures show
that demand has been below average for the past six months.
Spot prices are lower as sellers try to entice buyers into the
market, but many European economies remain very sluggish
and demand is elusive. Production has been cut back in line
with poor demand, and some sources stress that this is the
only way for the European industry to survive, as full output
would lead to oversupply. Others, however, question how long
an industry can run below 80% of capacity as the cost is too
high. Some producers are already talking of increases in
March, particularly if naphtha prices continue at the current
level.
Cracker update
In the week ending 8 February, contract margins (naphtha)
decreased by €65/tonne to their lowest level since August
2012. Margins were under pressure from a 3.7% gain in
naphtha costs primarily from a 2.3% strengthening of the
dollar, although naphtha prices also edged up by $14/tonne.
Co-product credits rose by 1.4% mainly on firmer pygas
values.
 Ethylene (Europe)

Page 2 of 3

Spot margins (naphtha) slipped by €14/tonne mainly due to Planned or

the higher feedstock costs. Spot co-product credits rose by Company Cracker location Timing
Unplanned
3.2% following gains in all constituent chemicals. Euro- mid-March to
denominated spot ethylene values rose on the strengthening Moerdijk, the Planned (not
Shell end April, 6
of the dollar, although spot prices in dollar terms were Netherlands confirmed)
weeks
unchanged.
Unplanned
Munchmunster, mid March for
Contract margins based on liquified petroleum gas (LPG) LBI (not
Germany around 25 days
softened by €35/tonne due to a 2.8% gain in LPG costs. LPG confirmed)
prices rose by $5/tonne but the effect was compounded by the Unplanned
stronger dollar. LPG margins retain the advantage over 2H of February
Versalis Dunkirk, France (not
naphtha margins, at €43/tonne. one week
confirmed)
Average cracker run rates continue to be pegged around 80- 26 April-24 Planned (not
BASF Antwerp, Belgium
85%, although a few cracker operartors said they were June confirmed)
running closer to 90% and even above, depending on Planned (not
Total Carling, France April-May
derivative portfolio and location. confirmed)
Gelsenkirchen end May-early Planned (not
There is no further update on the status of the Naphtachimie BPRP
No.3 , Germany July confirmed)
cracker at the Lavera site, in France – which is a joint venture
operation between INEOS and Total. INEOS had previously August-
Planned (not
said in a statement on 25 January that the unit was expected Versalis Priolo, Italy September 6
confirmed)
to restart in the first half of March and that repair work was well weeks
underway, following damage, which occurred on 22 December Olefins No4,
15 September- Planned (not
2012. It added that once the unit would resume output, its SABIC Geleen,
20 October confirmed)
operating rates were likely to be reduced for a period of time Netherlands
until the repair work is fully completed. The companies in Planned (not
INEOS Grangemouth, UK end Q3
question were not available to provide further comment at the confirmed)
time of writing. Cologne No 5, September- Planned (not
INEOS
Germany October confirmed)
Repsol’s cracker at Sines, in Portugal has not yet resumed
output, according to the company, who declined to provide any Planned (not
ExxonMobil Mossmorran, UK Q3-2 weeks
further information. Previous reports suggested that the confimed)
cracker could restart during February., according to market October- Planned (not
Repsol Tarragona, Spain
sources The cracker was taken down in December 2012, November confirmed)
thought to be because of poor cracker economics, although December Temporarily
the reason for the downtime was not officially confirmed. Repsol Sines, Portugal
2012 tbc idled
LyondellBasell’s cracker at Muenchmuenster, in Germany is
experiencing technical problems, which is expected to lead to
an unplanned outage in mid-March, which is likely to last for
around 25 days, according to market sources. The company
declined to comment on this in line with their policy.
Maintenance is due to take place at Versalis’cracker at
Dunkirk, in France next week for around 5-7days, in order to
address some current technical problems.

SPOT PRICES
Click for Price History Price Range Four weeks ago US CTS/LB
FD NWE PIPELINE EUR/TONNE n/c 1150.00-1160.00 n/c 1150.00-1200.00 69.65-70.25
CIF NWE USD/TONNE +50.00 1500.00-1550.00 +50.00 1450.00-1500.00 68.04-70.31
CIF MED USD/TONNE +50.00 1450.00-1500.00 +50.00 1400.00-1450.00 65.77-68.04

For deep sea product, no fresh volumes were being booked.

The spot market is fairly subdued and players are only sticking
to their contract volumes in most cases. On the pipe,
information was limited, one producer considered prices of
€1,150-1,160/tonne too low based on the recent firming trend
in upstream costs, but it said it was balanced in its own
system and had not seen any interest to buy spot on the pipe.
One trader suggested that while price levels in Europe were
attractive, it questioned whether there was any real fresh
availability for exports from other regions such as Asia and the
Middle East.
 Ethylene (Europe)

Page 3 of 3

Another trader, however, suggested that it was more a Prices down to $1,450/tonne CIF were still heard in NWE, but
question of affordability rather than availability of further they were not widely confirmed.
imports, stating that imports would not be as competitive,
taking into account the price levels in other regions and the Covering editor: Heidi Finch
high freight costs.
($1=€0.75)
There was talk that fresh import prices would need to be
This week on ICIS (www.icis.com):
closer to $1,650-1,700/tonne CIF, depending on export region
and vessel size, but there was some doubt about which 15 Feb 13 14:57 Crude falls over $1/bbl on poor US
derivative players would be able to pay this. industrial output data
One producer said it had been looking for some coastal 15 Feb 13 12:12 FocusEurope naphtha market tightness
volumes but had not managed to source any because of the still expected to persist
ongoing Lavera outage, consuming alot of spare product in
the Mediterranean. 15 Feb 13 11:57 Rising exports, imports buoy EU chems
trade surplus Jan-Nov 2012
The consensus was that CIF values of $1,400/tonne CIF Med
and $1,450/tonne CIF NWE were too low based on high 15 Feb 13 10:51US ethane cracking to cause more
upstream costs, some domestic output constraints and a lack petchem price volatility – analyst
of fresh competitively priced import volumes and the ranges
were edged up slightly to reflect the firmer sentiment.
Some players said they considered there to be little difference
in CIF values on the coastal and inland markets, because
while freight costs were traditionally lower for import volumes
in the Mediterranean when compared with NWE, this was
being weighed against ongoing output constraints in southern
Europe.

FEEDSTOCK PRICES (SPOT)

Click for Price History Price Range
NAPHTHA CIF NWE USD/TONNE +24.00 1007.00-1009.00 +4.00

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