The spread between delivered prices of large cargo propane and naphtha has widened out again slightly this week, with only limited demand from the traditional heating sector for propane, according to sources.
Platts assessed the spread between the two products -- which is a measure of the competitiveness of propane as an alternative feedstock to naphtha for petchems end-users -- at $72/mt Monday.
The propane/naphtha price spread for physical product was about $120/mt at the end of the second decade in October, according to Platts data, making propane a very attractive feedstock to petchems.
But by the middle of last week the physical spread had narrowed to $65/mt, which sources said would not encourage petchems to buy additional propane.
Industry source said that there was length on the propane market as a result of the current level of imports, with more 100,000 mt of imports had arriving in Northwest Europe during the latter part of October and another 160,000 mt forecast to arrive in the first half of November.
Although a number of these cargoes have been sold into the petrochemicals sector, sources said that there were some imports which might not have been placed.
"I am convinced the market is long in Northwest Europe," said one trading source.
