Record global butane flows to douse butane price premiums

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Global butane prices are exhibiting strength relative to their regional propane counterparts, atypical for this time of year when the lighter feedstock tends to hold a premium.  

Part of this could be attributed to current strength in the gasoline complex as global cracks are near their highest levels in months and above year-ago levels ahead of the switch to the winter gasoline blend in the Atlantic Basin, which uses butane as its primary blendstock. However,  Vortexa data shows a surge of incoming butane supply to key consuming markets that could cap butane’s strength in the coming weeks. 

Global butane exports (bd) (Aug-25 data reflects days 1-26) 

AFEI, ARA butane-propane price differentials ($/t, Argus Media prices) 

Global butane exports are coming in at a record high of 1.95mbd (+0.21mbd y-o-y) even after August butane arrivals charted a similar high-water mark of 1.92mbd (+0.27mbd y-o-y). 

The export push is primarily being led by the Middle East (mainly UAE and Saudi Arabia) and the Med. Interestingly, the US is seeing a m-o-m decline in butane exports (-88kbd) despite recent export capacity additions. 

China is the primary offtaker of these butane supplies as the country continues its efforts to further diversify its LPG supply sources, lessening its reliance on the US amid ongoing trade tensions that have yet to be resolved. In the Med, Turkey and Italy are likely calling on barrels for autogas needs, ahead of the official end of summer in late September.  

Global butane imports year-on-year growth (bd) by destination shipping region 

The Netherlands is likely stocking up for upcoming gasoline blending needs. We also note that butane appears to be the more cost-advantaged steam cracker feedstock in Europe come November, per our Vortexa forward steam cracker margin calculations, so a switch from propane could be behind the incremental gains as well. 

Going forward, futures values for these markets (Argus Media, CME) indicate butane’s premium status is quite short-lived and appears unlikely to last past the upcoming roll. This aligns with our outlook based on Vortexa flows data and compounded by expectations of higher-than-average sendout by the Middle East as prior OPEC+ cuts are unwound and the ongoing supply push by the US on the back of rising LPG production and fresh export capacity expansions.