Dow cracked no naphtha in the US Gulf coast and relied heavily on LPG feedstock in Europe, the company said on today's earnings call.
On the US Gulf coast, Dow used its expanded capacity for butane cracking to add more butane to the feedslate, chief executive Jim Fitterling said.
"We successfully achieved zero naphtha cracking this quarter, expanding our flexibility and avoiding an otherwise costly feedstock penalty," he said.
In Europe Dow has a high level of feedstock flexibility for its crackers, but still needs to crack a portion of naphtha feedstock. Propane prices in Northwest Europe averaged a $167/t discount relative to naphtha during the third quarter. In the US, models showed a more favorable margin on butane cracking relative to ethane during the same period.
Dow noted margin expansions in its packaging division, bolstered by greater demand and capacity expansions on the US Gulf coast that more than offset a $100mn loss because of downtime and repairs at a fire-stricken plant in Argentina. Those crackers are now back up and running, Fitterling said. The segment saw sales fall $1.1bn to $5bn versus year-ago levels amid a 4pc decline in volume, but margins rose to 15.8pc in the third quarter versus 13.9pc last year.
In September an Alberta judge ordered Nova Chemicals to pay Dow C$1.43bn for violations of earlier contractual commitments on ethane and ethylene allocation and production from a jointly-owned asset.
