European liquefied petroleum gas (LPG) prices rose across the board this week on the back of increasing upstream crude oil prices.
High prices and weak demand meant quiet propane trading, with one source saying they expected demand to stay low for several weeks.
“There’s not a single demand. Butane – that’s OK, but propane? Nobody wants it. I think we’re going to have this situation for a few weeks or maybe even months. And nobody is buying for storage so I think we have to wait until there’s cold weather. We are buying what we need. It’s crazy,” said one buyer.
“On the propane side for us at the moment, it’s quite calm,” said another source. “There is very, very poor demand.”
One source said almost all the propane supply from European refineries was sitting in Amsterdam-Rotterdam-Antwerp (ARA) storages. Buyers said they were purchasing hand-to-mouth, with no incentive to build up stocks until Europe sees the first cold weather.
The naphtha-propane spread for September spot cargoes lengthened from $90-95/tonne (€68-72/tonne) last week to $100-110/tonne in the latter part of this week, sustaining the pull toward propane as a petrochemical feedstock.
Good demand from refineries for butane as a gasoline blendstock helped to support prices. However, there were no large butane cargo trades seen this week, and little demand for large cargoes is expected in the first half of September.
One source said the market would become even quieter in early September as European refineries undergo scheduled maintenance, but would pick up thereafter on blending demand, with less butane available to the market.
($1 = €0.76)