Spot prices for coaster butane cargoes in Northwest Europe have gained support from tighter availability, according to industry sources.
During the summer surplus refinery butane is exported as coaster cargoes, which are usually between 1,000 and 3,000 mt in size.
Most of this product remains in Northwest Europe being used either by the petrochemical industry as an alternative feedstock to naphtha or used in the manufacture of MTBE, with the delivered price of butane at a discount to the delivered price of naphtha.
However, compared to earlier in the summer the flow of refinery butane has now gradually started to decline.
Sources said that one reason for this reduction in availability was due to refineries starting to maximize butane stocks in readiness for the change next month to winter grade gasoline, which results in much higher volumes of butane being blended into gasoline to increase the vapor pressure.
Spot prices for CIF coaster butane cargoes have increased by $85/mt in August climbing from the low $780s to a last published level Tuesday of $867.50/mt, based on Platts data.
The key CIF butane/CIF naphtha price ratio has, however, been fairly steady over the same period in a 90-92% range with the last published level Tuesday showing a butane discount to naphtha of 91.0%.
