The spot price for FOB butane barges in the Amsterdam-Rotterdam-Antwerp region have remained weak since the beginning of the year on poor demand, industry sources said Thursday.
In winter, butane barges from ARA refineries are used for gasoline blending and as a feedstock in the production of MTBE. Butane can also be used by the petrochemicals sector as an alternative feedstock to naphtha, but at this time of the year it is usually too expensive.
However, blending demand is currently limited due to poor gasoline blending economics.
Buying interest for the MTBE sector is also quite thin, with LyondellBasell covering a significant portion of its requirements with North Sea butane, an industry source said Thursday.
"There clearly is not much demand," said one trader.
Based on Platts data, spot FOB ARA butane prices have fallen by $75/mt since the beginning of January to hit $810/mt Wednesday, Platts data showed.
The key CIF butane/CIF naphtha price ratio has also declined over the same period, decreasing from just over 96% to a last published level Wednesday of 89.3%, based on Platts data.
These low butane prices have resulted in some ARA product being absorbed into the petrochemicals sector, but the volumes are not as high as those seen during the summer months.
