Spot prices for butane at the French Mediterranean port of Lavera have strengthened due to a combination of FOB demand and tight availability, according to industry sources.
During the summer period most surplus refinery butane is absorbed into the petrochemicals sector at Lavera as an alternative feedstock to naphtha, although there are still some exports to Morocco, Tunisia and Egypt.
At the beginning of August, BP was a seller of butane FOB Lavera and the key FOB butane/CIF naphtha price ratio decreased from over 103% down to 96.6%, based on Platts data.
Since then the butane/naphtha price ratio has gradually drifted downwards to reach 94% by the end of the second decade in August, but has strengthened again to reach a last published level of 98.2% as some buying interest emerged for spot butane.
Petredec was a buyer at the end of last week of 2,500 mt in the Platts Market on Close assessment process FOB Lavera August 31-September 2 at $940/mt, but with surplus refinery product already committed to petchems and nominated exports no offer was received.
"I think there is not much to sell FOB," said one industry source.
The flat price of spot butane FOB Lavera has increased by $60/mt over August rising from the high $870s/mt to a last published level Tuesday of $937.50/mt, again based on Platts data.
