Have Shell’s Chemical Margin Markers Fallen?

Regional chemical margins where Royal Dutch Shell’s (RDS.A) chemical operations are carried out are indicators of Shell’s chemical margins.

These chemical marker margins are the US ethane, Western European naphtha, and Northeast and Southeast (or NESE) Asian naphtha margins.

In 2Q16, all three margin markers registered falls. The US ethane margin fell 20% over 2Q15 to $447 per ton. The Western European naphtha margin and the NESE Asian naphtha margin fell 4% and 10%, respectively, over 2Q15 to $588 per ton and $663 per ton, respectively, in 2Q16.

The iShares U.S. Energy ETF (IYE) has ~41% exposure to integrated energy sector stocks.