Butane coasters edged to their lowest level against naphtha in more than five months on Wednesday, as a lack of demand from gasoline blenders and well-covered petrochemical players left sellers searching for a floor for prices.
On Thursday, the spot CIF butane coaster market was assessed at $541/mt, or about 91% relative to naphtha, the lowest level since August 8, 2017.
"There was not any gasoline blending demand going on [on Wednesday]," said a market source.
However, at current levels buying interest from petrochemical buyers should start to re-emerge, they added.
"There is interest at these levels, [though] some of them already did bits and pieces in advance," the source said.
That softening has been seen across the butane complex in recent weeks, with additional supply on the butane cargo market also adding to the overall length in Northwest Europe.
On Thursday, butane FOB ARA barges were assessed at $544/mt, about 92% against naphtha on an FOB basis, and the lowest level since August 30, 2017.
Large cargoes were also sitting at $488/mt, or 82% relative to naphtha, their lowest level since July 13, 2017.
"[It is] very difficult to do anything on a prompt basis," said a market source. "Demand is very oversupplied."
The closed arbitrage for gasoline tons from Europe to the US has suppressed demand for blending components this winter compared to previous years.
While some patchy demand has supported prices on CIF coasters and inland barges on and off, that has frequently left butane searching for a price floor from petrochemical players, who use butane as an alternative feedstock to naphtha.
