Prices of butane coasters on a delivered basis pushed past 90% relative to naphtha on Tuesday, boosted by petrochemical demand and ending a price standstill that had lasted for nearly three weeks.
Propane spot CIF coasters were assessed at $420/mt Tuesday, about 91% relative to the CIF ARA spot naphtha cargo.
That put coasters at the highest price since March 2 this year.
The rise came after CIF coasters had held around 89% relative to naphtha since July 21, as petrochemical buyers hesitated to buy above the 90% mark.
But diminished supply on the butane market in Northwest Europe has been bullish for the complex in recent weeks, also boosting prices for cargoes and barges.
Supply has been restricted by the closed arbitrage from the US to Europe, as well as maintenance at the UK's Grangemouth field-grade export terminal, which is expected to last until the end of the month, and a recent outage at Shell's Pernis refinery, the largest in Europe.
Pernis typically supplies the nearby Moerdijk cracker with butane feedstock. But buying interest from Shell across LPG to cover demand for mid-August has also helped fuel bullish sentiment in the market.
Meanwhile, demand has been supported by petrochemical buyers, who have been more interested in butane coasters relative to propane due to high prices on that market this summer.
This has been exacerbated by product being diverted into the FOB butane market to serve Moroccan demand from the West Mediterranean, where product from local refineries has been scarce.
On Tuesday, prices for CIF NWE large cargoes and FOB barges in the Amsterdam-Rotterdam-Antwerp hub also rose.
The price for CIF NWE large cargoes was assessed Tuesday at $425/mt, 93% relative to naphtha and the highest since late February.
That followed interest from Shell in sourcing 20-22 kt or 8-12 kt for mid-month last week and early this week.
"I think [the Shell indication] has been quite bullish for the market," a source said. Shell said Tuesday, however, Pernis was slowly being restarted, which would ease some of the supply constraints.
On Tuesday, FOB barges were assessed at $406/mt, 89% relative to naphtha, the highest since the start of March.
