Europe turns to cracking LPGs on high naphtha

29 February 2008 17:23  [Source: ICIS news]

LONDON (ICIS news)--Cracker operators have begun to use liquefied petroleum gases (LPGs) instead of naphtha as feedstocks, as market fundamentals left the latter at a premium, market participants said on Friday.

With large cargo propane trading at $800-810/tonne (€528-535/tonne) CIF (cost, insurance and freight) NWE (northwest Europe) and butane at $810-820/tonne CIF NWE against naphtha’s $862-866/tonne CIF NWE, according to global chemical intelligence service ICIS pricing, it was now cheaper to crack LPGs.

“When propane or butane trade at 95% of naphtha or less, then you can substitute them as a cheaper feedstock,” said a trader source.

Propane was valued at 93% of naphtha and butane at 94% so it was clear that substitution could now be made, players said, and the recent upturn in propane demand seen in the market supported this.

($1 = €0.66)

Kawai Wong contributed to this article

By: Peter Salisbury
+44 20 8652 3214

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