SunSirs:Domestic Butadiene Market Fluctuated Up in August

　　1.the price trend

　　In August 2019, the market for butadiene fluctuated upwards. According to SunSirs monitoring, the price of butadiene at the beginning of the month was 9045 RMB/ton, and at the end of the month was 10277 RMB/ton, which was rose by 12.96% in the month. Prices fell by 24.14% compared to the same period last year.

　　2.Analysis of Influencing Factors

　　Products: In August, the domestic butadiene market fluctuated and the market rose strongly in the second half of the month. By the end of the month, Sinopec East China's supply price was 10,600RMB/ton, up 1,300RMB/ton; Liaotong chemical auction base price was 10,210RMB/ton, up 1400RMB/ton. After reaching its peak in early August, the downstream synthetic rubber rose weakly, the production profit hanging upside down increased, some private enterprises decreased or stopped, the demand side dragged on the butadiene market, and the price of butadiene rose and fell in mid-August. However, domestic spot supply continued to be tight, Malaysia's high-price trading news in mid-month boosted the external market substantially higher, Sinopec's supply price increased and East China's spot resources were scarce, the prices of northern export manufacturers increased, and some high-price sources flowed into the East China market, boosting the overall market. Although the downstream rubber market is limited, butadiene supply is strong, the market is difficult to find low-price supply, and the middleman offer is firm.Enterprises: Sinopec East China and South China Butadiene Ring Ratio increased by 1300 RMB/ton to 10600/10700 RMB/ton; as of 29th, Liaotong Chemical Bidding Base Price was 10210 RMB/ton, Ring Ratio increased by 1400 RMB/ton, the total volume in a month was 1560 tons, Ring Ratio contracted by 50.41%; As of 28th, Fushun Petrochemical Bidding Base Price was 9700 RMB/ton, trading range. In 9950-9960 RMB/ton, the total volume in the month is 1680 tons, with a ring-to-ring increment of more than 1,000 tons;on August 6, 100,000 tons/year oxidative dehydrogenation unit was put into operation in Nanjing Chengzhi, On August 11, excellent products were produced. The total output of this month is about 4,000 tons, and the supply contract is the main one. The manufacturer plans to stop for about 7 days in early September; Sylvan Petrochemical's 100,000 tons/year oxidative dehydrogenation unit was restarted in the middle of the month, and the supply contract was downstream, and the price was 10,000 RMB/ton. Due to the upstream equipment problem, the load of Jiutai butadiene unit in Inner Mongolia was not high, and the listed price was 10,500 RMB/ton at the end of the month, which increased by 1,500 RMB/ton annually. In the middle of the month, 2000 tons of Ratian in Malaysia were tendered for FOB of 1240 dollars/ton. Prices were traded to factories downstream of Taiwan, which pushed the outer disc up to 1300 US dollars/ton CFR in China.Industry: According to the price monitoring of SunSirs there were 37 kinds of commodities in the chemical sector rising in the price of commodity prices in August 2019, among which 15 kinds of products increased by more than 5%, accounting for 17.9% of the monitored products in the sector. The top 3 commodities were hydrogen peroxide (39.93%), acetic acid (20.90%) and butadiene (14.47%). There were 39 kinds of commodities with a decrease in the chain ratio, 13 products with a drop of more than 5%, accounting for 15.5% of the monitored products in the sector; the top 3 products were yellow phosphorus (-27.58%), epichlorohydrin ( -23.28%) and sulfur (-19.38%). The average increase or decrease of this month is 0.03%.

　　3.Market outlook

　　Looking at the market outlook, the positive side: the external market is high, the domestic supplier stocks are low and short-term shortage of spot resources in East China. On the bearish side, the downstream synthetic rubber market is limited, the profit of synthetic rubber is under pressure, and the start of construction is declining. Shipments are expected to arrive in September. Recently, domestic manufacturers and tank farms have low stocks, which support the firm's price. The short-term market is difficult to supplement with low-cost sources. Under the strong support of the supply side, it is expected that the market performance in the first half of September will be high. However, as the price of butadiene rises, the profit of the downstream industry will be under pressure, or drag down the start of construction; in addition, some latex enterprises do not rule out the impact of the policy to start poor construction, just need also weakened expectations, September demand is weak. At the same time, It is heard that more than 10,000 tons of Iranian goods are expected to arrive at the port, and the supply has also increased. In anticipation of weakening supply and demand, the market is not expected to exclude downside risks in late September. In addition, the high-priced transaction before the external market is slightly accidental, and whether the late market can continue to be strong remains to be discussed. Sunsirs analysts predict that domestic butadiene market consolidation will dominate in September. Businessmen are advised to pay careful attention to the news guide.