OREANDA-NEWS. Spot butane prices at Mont Belvieu, Texas, tumbled to 54?/USG today, a value unseen since December 2008, as price drops in other energy commodities combined with limited demand for the NGL.

EPC butane started the session valued at 54?/USG, 3.875? weaker than Tuesday's lowest trade, and rose in choppy trade to 56?/USG as buyers stepped into the market on cheaper spot prices.

Although butane prices pared losses in morning trade, the value relative to WTI tumbled. By midday, EPC butane stood at about 40.8pc of WTI.

Butane lacks the export demand support that Gulf coast propane has enjoyed throughout a low pricing environment. After peaking in September 2014 at 112,000 b/d, butane exports from the US tumbled with the fall in crude oil pricing, according to federal data from the US Energy Information Administration (EIA). Exports averaged 56,600 b/d between October and February.

In contrast, propane exports have continued to rise and reached a record-high 661,000 b/d in February.

But fresh butane export demand is emerging after Sunoco Logistics completed a second phase in its Nederland, Texas, LPG export terminal. The firm this month loaded butane cargo for the first time aboard the Crystal Sunrise for a shipment to Turkey.

During the first half of the month butane at the Gulf coast had been gaining, averaging about 63.44?/USG, as more petrochemical producers were heard ramping up their butane consumption as a feedstock.

However, butane cracking is limited as only so many producers have the ability to crack the heavier feedstock. Instead, petrochemical demand for ethane has been increasing and subsequently firming spot prices at the Gulf coast.

Ethane started today's trading session valued at 21?/USG, a value unseen since 27 February, but fell as sharp declines seen in the natural gas market pulled values down.

Although ethane values were brought down on declines seen in the natural gas market, ethane values managed to gain back its premium to its fuel value after dipping to a discount in recent sessions.

At midday, ethane stood at about a 0.195? premium to natural gas.

In the midcontinent, Conway, Kansas, butane prices fared similarly, dropping dramatically after market open today. After a short stint of early and midmorning trading, Conway butane emerged 4.5? lower than the prior session's peg, at 48?/USG, the product's lowest cash price since 5 December 2008.

Priced off an intraday low of 48?/USG, Conway butane is at its lowest value to WTI since Argus started pricing the commodity in August 2001.

Conway butane has been on the steady decline since early-to-mid March as the transition away from high-RVP gasoline marked the end of butane blending season in the midcontinent. The product drew intermittent strength from Conway/Mont Belvieu location spreads last month as the spread widened, but spread trade activity has since quieted.