The price of butane coasters on a FOB basis in Northwest Europe surged from $632.50/mt at the beginning of September to $697.50/mt Tuesday, according to Platts data.
"Blenders have come back into place and are driving the market," a source said.
In addition, sources also said that refiners are holding on to volumes of butane ahead of the switch to winter-specification gasoline.
"They will keep as much as they can," another source said.
The European gasoline market shifts from summer to winter specification product on October 1. Winter specification gasoline has a higher reid vapor pressure (RVP) of 90 kpa compared with 60 kpa for summer-grade fuel.
Butane is a high RVP gasoline component and can be used in higher percentages in winter-specification gasoline than in summer grade.
The shift from summer to winter gasoline typically leads to a rise in interest from gasoline blenders for butane.
Butane "already is on the agenda," a gasoline trader said.
The upcoming interest from gasoline blenders has coincided with recent maintenance in the North Sea at Norway's LPG export terminals at Karsto and Mongstad, which has contributed to the market tightness, sources said.
"The fact that we are in North Sea maintenance...makes the market very tight," a source said.
In addition, butane from Northwest Europe has been making its way steadily to the Mediterranean over the past week, depleting further stocks in the north, sources said.
With Karsto back since the end of last week, however, the supply tightness is expected to ease, sources said.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
