"Propane prices have come off this week versus naphtha. You will begin to see it becoming more competitive with petrochemicals [companies] slowing down their naphtha purchases," said one light ends trading source Friday.
"There was not much propane available," a source said Friday, adding that "at the end of next week cargoes are coming, so prices will have to come down."
On a propane/naphtha spread basis, however, spot prices are not yet supporting any prompt requirements for propane among petrochemicals companies. At the close Thursday, the price of naphtha cargoes CIF NWE was $14.75/mt under the price of propane CIF NWE, which was assessed at $692.50/mt.
But open arbitrage possibilities on the back of high NWE prices are expected to result in a healthy influx of propane cargoes to the region towards the end of September and into early October, trading sources said.
Cargoes are expected to arrive from Algeria and Houston, as well as from the Bonny terminal in Nigeria, sources said.
"Arbs are open from West Africa, the USGC and the Mediterranean," a source said.
In addition, the Karsto LPG export terminal on the west coast of Norway resumed exports a week ago after completing scheduled maintenance, trading sources said. The terminal was in maintenance between August 18 and September 8, sources said.
Another Norwegian export terminal, at Mongstad, however, remains closed for maintenance until the end of September, according to market sources.
The expected influx of propane cargoes put a cap on the recent surge of cargo prices on a CIF basis in Northwest Europe, which maintained levels at around $690/mt over the course of the week, following a $40/mt spike in early September, Platts data show.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
