Falling European LPG prices attract naphtha buyers

14 January 2011 21:31  [Source: ICIS news]

LONDON (ICIS)--The recent falls in liquefied petroleum gas (LPG) prices has resulted in an increase in demand from the petrochemical sector, naphtha traders said.

Propane has fallen more than $100/tonne (€75/tonne) since the beginning of the year.

One trader said that demand for naphtha from the petrochemical sector was limited as the competing LPG feedstock was much cheaper.

Another trader noted that one of the reasons for the recent trend of naphtha cargoes being shipped to Asia was the decrease in LPG prices.

However, some market sources from the petrochemical sector noted that crackers were still primarily using naphtha as propylene and butane demand was still strong and prices were still relatively high.

One view was that as crackers were different, and therefore have different economics, some were able to easily switch to using LPG, but that this flexibility was only limited to a few units in Europe.

Butane cargo prices were reported at $875-880/tonne while propane cargo prices were assessed at $880-900/tonne CIF (cost, insurance and freight) NWE (Northwest Europe) on Friday, compared with $855-860/tonne and $1,010-1,020/tonne reported on the 24 December, respectively.

The naphtha price range for cargoes on Friday was at $863-871/tonne FD (free delivered) NWE, while on 24 December it was at $861-871/tonne.

($1 = €0.75)

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By: Jo Pitches
+44 208 652 3214



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