LPG prices slip on crude values despite tightness

12 April 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--Values for propane and butane eased in most European regions this week, tracking falls in Brent crude oil, sources said on Friday.

Propane barge prices in the Amsterdam-Rotterdam-Antwerp (ARA) region were the only area to buck the trend, with limited availability on small parcels and railcars putting a floor on prices.

Values were up $25/tonne for propane barges on a free on board (FOB) ARA basis to $850-860/tonne, with railcars attracting a further $20/tonne premium.

A producer said the low stock environment for propane is a result of strong petrochemical demand which started in January when prices dropped, and has continued to dig into the winter reserves.

“May will be tight, and it will be a case of hand-to-mouth buying,” the producer said.

The prolonged winter conditions across Europe and the maintenance season are also weighing heavily on supply levels, sources said.

Conditions are somewhat more balanced in the butane market, however there is still reasonable demand from petrochemical buying for small butane cargoes (coasters), but sources said there was little upside in the market.

“There appears to be more production [from the US] and less demand from the east which will put a cap on prices and the market could get long quickly,” the producer said.

Stronger percentages in the butane market negated some of the downward pressure from falling crude prices, however the overall trend was weaker with prices down by $15-45/tonne.

($1 = €0.76)

By: Kate Wilcock
+44 208 652 3214

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