Physical bids for spot cargoes of North Sea propane remain above swaps prices due to tight availability over the balance of April, industry sources said Wednesday.
The end of winter and a decline in heating demand for propane should result in more plentiful supplies of North Sea product, but spot availability over the rest of this month is fairly tight.
Industry sources said this was due to a combination of some April North Sea propane being committed into the petrochemicals sector, where it is used as an alternative feedstock to naphtha, and also some exports of North Sea propane being moved out of the area.
"Second half April is tight," said one trader. "I do not see many tonnes around," added another source.
Spain-based trader Vilma bid Tuesday for a 20,600 mt CIF propane cargo at 50% $980/mt and 50% balance April quotes flat/mt, which sources said was equivalent to $976.50/mt. The value of balance April swaps was reported to be at $973/mt. No public offers for North Sea cargoes were seen Tuesday.
Based on Platts data the last published price for CIF cargoes of North Sea propane was $979.50/mt Tuesday.
The market is steeply backwardated with May propane swaps reported to be at $932/mt Tuesday because of the tightness in April North Sea product.
