"We see lots of vessels moving from the North to the South," a source said.
The spread between butane prices on a FOB basis in Northwest Europe and the Mediterranean widened to around $60-70/mt in the first 10 days of September prompting the arbitrage moves, sources said.
The higher prices in the Mediterranean were attributed to tightening availability on the back of rising demand from gasoline blenders who use butane for winter-spec gasoline, as well as some petrochemical covering for the steam crackers, sources said.
"It is still very tight," another source said.
Meanwhile prices in Northwest Europe have been clawing higher, drawing support both from the open arbitrage and demand for gasoline blending, thus eventually narrowing the spread with the Mediterranean, sources said.
"The open butane arbitrage to the Mediterranean makes the market very tight," a third source said.
FOB Mediterranean was assessed by Platts Monday at $737.50/mt compared to $689.50/mt FOB Northwest Europe, thus narrowing the spread to $48/mt.
"It is still possible to take a cargo from the North to the Mediterranean," the first source said, but added that the movement will be less profitable.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
