North Sea propane prices increase on tight availability

London (Platts)--9Oct2013/215 pm EDT/1815 GMT


The price for spot cargoes of North sea propane has risen because of tight availability, with BASF, Borealis, Dow Chemicals and Sabic all reported by sources to be receiving significant quantities.

In the absence of cold weather in Northwest Europe, petchems are the main outlet for surplus North Sea propane, which is used as an alternative feedstock to naphtha when CIF propane is cheaper than CIF naphtha.

Also pressuring prices higher are trader short positions which are proving difficult to cover. Both Totsa and Vilma were buyers of 20,600 mt CIF cargoes Tuesday but no public offers were seen -- North Sea availability was said by sources to be tight prior to the end of October and planned imports for the second half of the month appeared to be sparse.

Spot prices for delivered cargoes of North Sea propane have reacted to the tightness in availability with bids seen at progressively higher levels.

CIF propane prices have risen $60/mt this month to $800/mt Tuesday, Platts data showed. The spread between CIF naphtha and CIF propane has narrowed $40/mt over the same period to $98/mt.

--Derek Hardy, derek.hardy@platts.com
--Edited by Dan Lalor, daniel.lalor@platts.com


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