08 November 2013 16:55 [Source: ICIS news]
LONDON (ICIS)--Northwest European propane supply is tightening as long-awaited US cargoes are being diverted from their original European destinations to the more lucrative Latin American markets, industry sources said on Friday.
On Friday, large propane cargoes were selling at $860-870/tonne (€636-644/tonne) CIF (cost, insurance & freight) NWE (northwest Europe), $50/tonne more than on the previous Friday.
"[There is] good demand in South America, so some US cargoes [are being] diverted from Europe to Latin America. Large propane cargoes buyers [in Europe] wouldn’t mind having another cargo," a liquefied petroleum gas (LPG) trader said.
There is good demand for propane in the Mediterranean region, but local supply remains tight on the back of refinery maintenance, sources said.
Total, Shell and Esso are some of the propane refinery suppliers that are said to be short on supply.
Meanwhile, propane supply on barges coming out of the (Amsterdam-Rotterdam-Antwerp) region is restricted, a second LPG trader said.
"If you need a barge right now you need to pay $903-910/tonne FOB ARA," the source said. ICIS propane barges were assessed at $890-910/tonne FOB (free on board) ARA on Friday evening.
A third LPG trader said: "If you really search for it [product] you can find a refinery seller, but they are selling at the same level as terminal sellers."
The rise in propane prices have led to a narrow naphtha-propane price spread. The price spread between naphtha and propane cargoes narrowed to around $25/tonne CIF NWE from around $90/tonne last week, reducing the pull towards the cheaper feedstock propane.
($1 = €0.74)
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