Petrochemicals companies in Northwest Europe have started to buy cargoes of refrigerated propane for delivery in November, according to industry sources.
Petchems traditionally use propane as an alternative feedstock to naphtha during the summer when the delivered price of propane is at a discount to the delivered naphtha price.
This year, a plentiful supply of field grade propane in October has resulted in a wide naphtha/propane price spread, and petrochemicals firms have continued to crack significant quantities of propane into the autumn.
Based on Platts data, the last published naphtha/propane price spread Thursday was $95.25/mt, although earlier in the week the spread was above $100/mt.
With a steady stream of imports supplementing North Sea availability, this trend is now being repeated for next month, with petchems starting to buy propane cargoes for November delivery.
"I think there is more than enough [propane]," said one trader.
Sabic confirmed buying a 33,000 mt cargo from West Africa, for delivery to its Tees cracker in the UK around mid-November, and trading sources said that other November imports have also been sold into the petchems sector.
