Europe has fixed the first export of ethylene for the year, after five cargoes were fixed for shipment out of the region in the last quarter of 2011, sources reported Monday.
Sources said a 4,500 mt cargo of ethylene has loaded in early January on the Happy Condor for delivery from Tarragona in Spain to El Tablazo, Venezuela.
The previous five cargoes were also fixed for Venezuela.
"FOB price levels are at Eur900/mt ($1,149/mt) and higher," a source said, adding that inland values were now over Eur1,000/mt FD Northwest Europe.
"There is a big increase in costs and crackers are not being fully utilized," he added.
Cracker margins -- for both spot and contract volumes -- remained in the red this week, though they have retreated from the historic lows of Friday. Contract cracker margins were assessed at minus Eur140/mt that day, with spot cracker margins at minus Eur414/mt.
While ethylene prices have gained momentum since the beginning of the year, sources in the NWE market have expressed concerns that structural demand remains week. Sluggish demand has driven Europe -- a traditional net importer of ethylene -- to become a net exporter since September.
Maintenance work at the Houston terminal, which generally serves the Venezuelan ethylene market, also helped create an export opportunity for European producers.
Inland prices have been feeling further upward pressure this week on account of a depreciating euro. The single currency tested fresh 16-month lows against the dollar Monday as doubts continued over Europe's ability to tackle its debt crisis as German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Berlin.
"Eur1,000/mt FD NWE on the pipe is around $1,230/mt CIF ARA, you cannot find a seller [on the coast] at these prices," a source said.
In feedstock news, NWE naphtha prices continued to move up Friday, with crack swaps being assessed at minus $6.40/barrel and minus $7.05/b for the balance of January and February, respectively. The market continued to slowly move to a steep backwardated structure. Outright price was assessed at $948.50/mt CIF NWE or Eur745.8/mt CIF NWE.
