Asian petrochemical production margins were mostly positive in 2015 due to lower feedstock costs, despite the bearishness seen across global energy and commodity markets in the year, Platts analysis showed January 14.
Production margins for integrated aromatics and olefin producers in Asia, which use naphtha as their main feedstock, were mostly seen above typical breakeven levels in 2015, Platts calculations showed.
The production margin for styrene monomer averaged at $123.85/mt above the typical breakeven level of $940.43/mt FOB Korea over 2015, for isomer-grade mixed xylenes at $62.95/mt, paraxylene at $33.91/mt and toluene at $20.86/mt.
For olefins producers, the production margin for ethylene averaged at $382.51/mt above the breakeven level over 2015 and for propylene at $45.67/mt.
Margins were calculated using a formula based on the FOB Korea marker that is widely used in the market.
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The SM production margin hit a 22-month high of $375/mt on May 15 last year and the ethylene margin an almost 4-year high of $637.30/mt on June 23, Platts data showed.
"Despite overall slow demand, Asian petrochemical producers have benefited from the low oil price," a market source said January 12.
Integrated petrochemical producers enjoyed better production margins as their variable costs were reduced significantly by sharp falls in feedstock naphtha prices, which track crude oil prices more closely than the rest of the petrochemical sector, a market source said.
Next: Naphtha more closely linked to crude oil