Limited availability of coaster butane cargoes in Northwest Europe is supporting spot prices, industry sources said.
In the summer, surplus butane from refineries in Northwest Europe is usually exported as coaster cargoes, which are generally between 1,000 and 3,000 mt in size.
Most of this product is absorbed by the petrochemicals sector as an alternative feedstock to naphtha with the delivered butane price at a discount to the delivered naphtha price.
Some of the better quality butane grades are also used in the production of MTBE.
The supply of refinery butane has, however, been quite tight recently. This, coupled with strong buying interest from some parts of the petchems sector, has provided support to spot prices.
Based on Platts data the spot price for CIF butane coasters has increased by almost $60/mt since the beginning of July, moving up from just under $760/mt to a last published level Wednesday of $815/mt.
The key CIF butane/CIF naphtha price ratio has also been quite resilient starting this month at 90.9%, increasing to 93.0% before decreasing slightly to a last published level Wednesday of 92.0%, again based on Platts data.
