Petrotahlil -European contract cracker margins plummeted week on week on the back of a steep fall in the ethylene contract reference price for April and a small recovery in feedstock prices, ICIS margins analysis showed on Monday.

The April contract price was settled at €720/tonne, down by a record €200/tonne from March.  Spot pricing also dropped by a similar amount as demand remained subdued.

This is the lowest monthly contract reference price since June 2009  and the largest single month-on-month adjustment since the contract timing changed from quarterly to monthly in January 2009 in response to the 2008 financial crisis.

Naphtha and liquefied petroleum gas (LPG) costs rose last week as crude oil prices surged on  hopes of a price war truce between Russia and Saudi Arabia.

In the week to 3 April:

• Naphtha prices rose by 6%
• LPG costs increased by more 13%

Naphtha-based contract margins declined by 37% week on week, co-product credits fell:

LPG-based contract margins dropped by 37%, co-product credits fell:Contract margins by feedstock:

Spot margins by feedstock:

In the week to 3 April, a similar drop was seen in spot margins as ethylene and co-product prices fell sharply.

Demand was mixed in the market, depending on the sector. Supply was long even though one third of crude oil refining capacity in Europe is offline or operating at low rates, according to ICIS analysis.