Demand for coaster butane in Northwest Europe has emerged as spot prices have fallen, according to industry sources Wednesday.
In the winter period most surplus refinery butane is blended into gasoline to increase the vapor pressure.
With the switch to lower RVP summer grade gasoline, however, refineries have now started to increase butane exports, most of which is moved on coaster vessels which are generally between 1,000 and 3,000 mt in size.
This additional availability has pushed spot prices down to levels where coaster butane has now become an attractive alternative feedstock to naphtha for the petrochemicals sector.
Industry sources said that there is now a steady flow of coaster butane moving into steam crackers in the UK, Netherlands, Belgium and more recently Sweden.
Based on Platts data spot CIF coaster prices have decreased by $105/mt since the beginning of March falling from just below $890/mt to a last published level Tuesday of $782.5/mt.
The key CIF butane/CIF naphtha price ratio has also weakened over the same period declining from 95.4% to a last published level Tuesday of 88.8%, again based on Platts data.
