Petchems absorb most surplus Lavera butane as export demand remain thin

Chemical News: Petchems absorb most surplus Lavera butane as export demand remain thin

https://www.chemnet.com Jul 12,2011 Platts
Petrochemicals producers continue to absorb most surplus butane at the French Mediterranean port of Lavera as export demand remains thin, according to industry sources Monday.

During the summer surplus butane from refineries at Lavera is either used by petrochemicals as an alternative feedstock to naphtha or is exported to North African destinations such as Tunisia and Egypt where it is used in the traditional cooking and heating market.

Current export demand, however, is said by sources to be quite limited resulting in most excess refinery butane being absorbed by the petchems sector.

Based on Platts data, spot FOB prices were in the low $960s/mt in the middle of last month, but then fell to the low $870s/mt at the beginning of July before reaching a last published level of $892.50/mt.

But over the same time period FOB butane prices, when expressed as a percentage of the naphtha price, have steadily decreased from being above naphtha parity in the middle of June down to a last assessed level 92.2%, again based on Platts data.

Despite the weak demand for exports, spot availability at Lavera was reported by sources to be fairly tight over the next one or two weeks with refineries making forward supply commitments into petrochemicals.

"[There is] not a lot of product available," said one industry source.
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