According to SunSirs' commodity market analysis system: In 2025, the average price of 1,3-butadiene in the domestic market was 10,800 RMB/ton at the beginning of the year and 8,333.33 RMB/ton at the end of the year, representing a 22.84% decrease annually. The 1,3-butadiene market in 2025 showed a trend of "initial increase followed by a decrease, with overall volatile downward movement." The year can be divided into two stages: an initial increase followed by a decrease in the first half of the year, and a volatile downward trend in the second half.

According to data from SunSirs, the 1,3-butadiene market in 2025 saw more declines than increases, with upward trends in 5 months and downward trends in 7 months. The highest increase was 19.33% in December, while the largest decrease was 17.58% in April.

I. Review of the 1,3-butadiene market in 2025

First half of the year: Policy measures combined with supply factors led to an initial rise followed by a decline, resulting in an overall downward trend.

In the first half of 2025, the 1,3-butadiene market was significantly affected by short-term factors, but the underlying logic of loose supply and demand remained unchanged. Price fluctuations depended on factors such as plant maintenance and policies, with an overall trend of initial increase followed by a decline, resulting in an overall downward trend.

January-April: Supply and demand were generally balanced, leading to fluctuating and downward-trending prices.

From January to April, loose supply and demand conditions led to a continuous decline in prices. On the supply side, Wanhua Phase II and ExxonMobil added a combined 400,000 tons of new capacity, bringing the total industry capacity to 7.037 million tons. Imports increased significantly year-on-year in January and February, resulting in high inventory levels at East China ports. Plant operating rates remained stable at around 75%, ensuring ample supply. On the demand side, the synthetic rubber and tire industries faced pressure on operating rates due to the US-China tariffs, and the ABS industry had high inventory levels, only maintaining purchases to meet immediate needs. Prices fell from 10,800 RMB/ton at the beginning of the year to 9,200 RMB/ton at the end of April, reaching a temporary low point for the first half of the year.

May: Supply contraction coupled with favorable policies led to a significant price increase.

In May, the market reversed course, with prices surging rapidly before stabilizing. Supply-side factors were the core drivers, with concentrated maintenance shutdowns at Hengli (140,000 tons) and Maoming Petrochemical (50,000 tons) significantly impacting production capacity. Inventories at East China ports fell to low levels, leading traders to hold back on sales and push for higher prices. Sinopec raised its price to 11,100 RMB/ton. On the demand side, the easing of US-China tariffs boosted sentiment, leading to an increase in synthetic rubber futures prices. The operating rate of 1,3-butadiene rubber rose to 74.7%, and downstream companies released their restocking demand, resulting in a monthly price increase of over 22%.

June: Fundamentals were generally bearish, and prices fluctuated downwards.

In June, market enthusiasm subsided, and prices fluctuated before stabilizing at lower levels. On the supply side, maintenance shutdowns ended and production facilities gradually restarted, while increased imports supplemented the market. Inventories at East China ports saw a slight increase, and the market returned to a state of oversupply. On the demand side, high inventories of synthetic rubber were evident, leading to weaker 1,3-butadiene prices. Downstream buyers resisted high raw material prices, resulting in sluggish trading activity.

Second half of the year: Oversupply was the core problem; prices fell by 7.41%.

July-September: Supply surplus intensified, and prices continued to decline.

From July to September, the market supply and demand imbalance became prominent, and prices steadily declined. On the supply side, the refinery maintenance season ended, and plant operating rates recovered to over 65%. ExxonMobil's Huizhou project operated at full capacity, and the influx of 140,000 tons of product from Lotte Chemical's Indonesian plant into Asia further increased supply pressure. The opening of import arbitrage opportunities led to a concentration of European and American goods arriving at ports, further exacerbating inventory pressure. On the demand side, operating rates in the tire industry remained low, synthetic rubber inventories were high, and downstream buyers only maintained essential purchases. Prices fell from 8,840 RMB/ton in early July to 7,200 RMB/ton at the end of September, reaching a new low for the year.

October-November: Supply and demand were in a weak balance, and the market was fluctuating within a range.

In October and November, the market entered a state of weak equilibrium, with prices fluctuating within a narrow range. On the supply side, some plant maintenance led to a slight decrease in production, and after the restart of facilities such as Fushun Petrochemical, operating rates remained low. Inventories at East China ports decreased to 24,600 tons, alleviating some pressure. However, further arrivals of imported cargo were still expected, and the overall supply remained ample. On the demand side, operating rates in the tire industry recovered to normal levels, and synthetic rubber futures showed a firm trend, providing temporary support for 1,3-butadiene prices. Prices fluctuated in the range of 7,000-7,500 RMB/ton, with most transactions occurring at lower prices.

December: Short-term positive factors provided a boost, leading to price fluctuations and a rebound.

Market sentiment improved in December, leading to volatile price increases. On the supply side, temporary shutdowns for maintenance at Dongming Petrochemical reduced supply, and major companies collectively raised their prices. Sinopec's listed price rose to 8,300 RMB/ton, strengthening traders' willingness to hold prices firm. On the demand side, the synthetic rubber futures and spot markets rose in tandem, with 1,3-butadiene rubber prices increasing by 4.03%, driving improved demand for raw materials. Towards the end of the month, boosted by rising international prices, the price rose to 8,012.5 RMB/ton, a monthly increase of 13.85%. However, high prices met resistance, and weak end-user demand limited further gains, resulting in a volatile and consolidating market.

II. 1,3-butadiene Market Outlook for 2026:

Cost perspective: Oil prices are expected to fluctuate at low levels in 2026, resulting in weak cost support.

The ongoing conflicts in Ukraine and the Middle East will continue to exert intermittent direct impacts on oil prices, causing periodic fluctuations, but are unlikely to alter the long-term trend. The supply surplus is expected to persist until the first half of 2026, with the IEA forecasting a global daily surplus of 4.09 million barrels. US shale oil production is projected to increase by 1.2 million barrels per day, driving this surplus. Although OPEC+ plans to suspend production increases in the first quarter of 2026, internal disagreements and insufficient spare capacity will limit the effectiveness of their adjustments, making a further decline in the price center highly probable. Influenced by the interplay of supply and demand, geopolitical conflicts, and OPEC+ policy adjustments, Business News Agency predicts that the crude oil market in 2026 will generally exhibit a "low-level volatile" trend.

Supply side: Expected to increase

In 2026, the increase in 1,3-butadiene production capacity will be significantly reduced compared to 2025, and the industry will enter a period of capacity digestion. Affected by the progress of supporting facilities for large-scale ethylene projects in the previous period, the estimated new capacity for the whole year is approximately 500,000 tons, a significant decrease from the 1.2 million tons added in 2025. The total capacity is expected to exceed 8.4 million tons by the end of the year. Most of the new capacity comes from integrated refining and petrochemical facilities, concentrated in East and South China. These facilities have strong operational stability, and the industry's operating rate is expected to remain in the 68%-72% range throughout the year.

According to customs data, from January to November 2025, the cumulative import volume of 1,3-butadiene reached 449,700 tons, a year-on-year increase of over 50%. In November alone, the import volume was 56,000 tons, with a net import volume of 56,200 tons, a significant increase of 69.80% compared to the previous month, but a decrease of 17.14% year-on-year. This was mainly due to the absence of exports and a substantial increase in imports during that month. In 2026, the import pattern is expected to stabilize. With the release of domestic production capacity, the frequency of import arbitrage opportunities will decrease, and the annual import volume is expected to remain between 450,000 and 500,000 tons, mainly to supplement the shortage of high-end products. At the same time, overseas plant maintenance and the recovery of demand in the Asian market will limit the impact of imported goods on the domestic market, and supply-side pressure will be somewhat relieved compared to 2025.

Demand side: Stable with a slight upward trend.

In the consumer sector, the core raw material for synthetic rubber is 1,3-butadiene, and synthetic rubber produced from 1,3-butadiene accounts for over 80% of total synthetic rubber production. Therefore, in terms of consumption structure, BR and SBR each account for 30% of 1,3-butadiene consumption, ABS accounts for 12%, latex and SBC each account for 9%, and nitrile rubber accounts for 5%. By 2026, the expected new production capacity for BR and SBR will reach 450,000 tons and 405,000 tons respectively. The proportion of high-performance rubber types such as solution-SBR and rare-earth BR will increase, adapting to the growing demand for tires in new energy vehicles and driving a steady increase in 1,3-butadiene demand. The ABS industry, driven by the upgrading demand for smart home appliances and lightweight automobiles, is expected to see improved capacity utilization, further supplementing 1,3-butadiene demand.

Market Outlook:

In the short term: Entering January, influenced by the Chinese New Year holiday, downstream industries generally have pre-holiday stocking needs. At the end of December, the 1,3-butadiene market already experienced an upward trend due to tight supply. With continued downstream demand in January, further upward movement is expected.

In the long term, the market supply and demand pattern is shifting towards a more relaxed state, with prices showing a trend of "volatile decline and a downward shift in the price center." On the supply side, the 620,000 tons of new capacity added throughout the year are mostly concentrated in the fourth quarter. Although delays in the commissioning of some facilities will affect actual production, coupled with an estimated 450,000-500,000 tons of imports for the year, the total supply will reach 6.18 million tons, gradually increasing supply pressure. As a result, the 1,3-butadiene market has limited room for further upward movement. However, downstream demand still provides support, and it is expected that the 1,3-butadiene market will mainly maintain a high-level volatile trend. Subsequent developments will focus on the performance of the downstream synthetic rubber market.

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