More cargoes of refrigerated propane are flowing into Northwest Europe in thriving petchem sector demand, as per Platts. Onset of warm weather that has reduced demand from the traditional heating market, has been replaced by emerging healthy demand from the petrochemicals sector where propane is used as an alternative feedstock to naphtha. Substitution of propane for naphtha is viable as long as the delivered price of propane is at a discount to that of naphtha.
In H2-April, sources said that over 100,000 mt of propane from Algeria and the US Gulf arrived in Northwest Europe with Dow, Borealis and Sabic all reported to have received refrigerated imports to use as feedstock. More imports, totaling about 120,000 mt, were expected to arrive in Northwest Europe in H1-May, with suggestions of even more cargoes towards the end of month. Based on Platts data, the propane/naphtha price ratio was just over 90% in the middle of April, increased slightly to 91.8% by the end of the month before reaching a last published level of 92.1%.