13 September 2013 17:34 [Source: ICIS news]
LONDON (ICIS)-- European butane prices fell this week as gasoline blending demand tailed off and more product became available, sources said on Friday.?xml:namespace>
Coasters trading at parity with naphtha on 6 September were at 96% today. Sources said the demand for gasoline blending pushing up last week’s prices had died down, while supply had increased as high prices encouraged those holding product to sell.
“There’s too much product. The price was too high: some guys didn’t want to sell but now they are all on the selling side,” one buyer said.
Propane prices were stable after the large decreases seen in the week ended 6 September. The market was balanced this week, with no supply restrictions and demand coming primarily from petrochemical crackers rather than heating buyers.
Large amounts of US product are expected to arrive in Europe late September to early October, although sources were unsure how much would be available on the [spot] market. One source said that at the current propane-naphtha spread of $135-$145 (€101- €109) petrochemical crackers would buy whatever was available.
“The petchems will crack that no matter what. I think it’s that simple. The fourth quarter [is usually] when propane goes out of cracking but the petchem crackers are contracting for cracking propane,” they said.
“There will be full blast cracking season as long as propane-naphtha is so weak”, a buyer agreed, but said there would still be excess supply which would go into storage building unless demand from the heating market increased.
($1 = €0.75)
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