Petrochemicals companies in Northwest Europe are showing little interest in spot North Sea butane as a feedstock and have been favoring cheaper propane, according to industry sources.
With a typical reduction in butane demand during the summer from the gasoline-related sector, surplus North Sea butane cargoes have historically been imported by the petrochemicals sector in Northwest Europe as an alternative feedstock to naphtha, with the delivered butane price at a discount to the delivered naphtha price.
Since the beginning of April, the CIF price for spot cargoes of North Sea mixed butane has been at around 96% of the CIF naphtha price, according to Platts data. Using last published prices Monday, this equates to a discount of $50.75 /mt.
Propane can also be used as an alternative feedstock to naphtha, but is currently much cheaper than butane, with the last published discount for physical refrigerated propane cargoes at $180.75/mt Monday, making it a much more attractive feedstock than butane.
"It does look overpriced," said one petchems trader.
