The North Sea propane market is considered oversupplied despite sales into the petrochemicals sector, as per Platts. North Sea propane is historically used as a heating fuel during the winter period, but this winter the lack of a sustained period of cold weather has reduced requirements for the heating sector and left some unplaced cargoes over the end January-early February period. Propane can also be used as an alternative feedstock to naphtha providing the delivered propane price is at a significant discount to the delivered price of naphtha. As per sources BASF, Dow and Sabic have recently bought 20,000 mt CIF propane cargoes to be used as feedstock. Based on Platts data the physical CIF naphtha was at a premium to CIF propane spread of about $60/mt at the beginning of this month, but last week this widened out to reach just over $100/mt and at this level petrochemical producers could justify buying propane.
18-Jan-12 
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