The domestic 1.3-butadiene market has weakened amidst volatility; spot prices declined continuously throughout the week, with trading levels steadily trending downward and overall market activity remaining sluggish. Prevailing spot quotes in East China fell consistently, marking a significant overall decline. The futures market mirrored this weakness in the spot sector; the main contract dropped sharply during early trading sessions, putting pressure on the synthetic rubber sector as a whole and fueling growing pessimism among market participants. Data from the SunSirs commodity market analysis system indicates that between June 19 and June 26, 2026, the domestic market price for 1.3-butadiene fell from 9,806.67 RMB/ton to 8,900 RMB/ton—a cumulative drop of 9.25%—reflecting a downward trend characterized by market weakness.
Cost perspective: This week, cost-side support for 1.3-butadiene completely vanished, shifting from a supporting factor to a drag on the market as prices for upstream raw materials weakened across the board. Geopolitical tensions in the Middle East eased, leading to a continued decline in international crude oil prices and a parallel drop in domestic crude futures. Influenced by these crude oil trends, naphtha market prices fell, and cracking margins in the refining and chemical sectors continued to contract. Domestic ethylene spot prices also softened in tandem with crude oil and naphtha; the overall decline in raw material costs completely eliminated the cost support for 1.3-butadiene, significantly easing cost pressures on producers. Consequently, there was little market appetite to maintain price levels, and spot quotes were repeatedly lowered in line with the downward trend in raw material costs. As of June 25, the settlement price for US WTI crude oil futures stood at $71.92 per barrel, while the settlement price for the September Brent crude oil futures contract was $75.50 per barrel.
Supply Side: This week, the domestic 1.3-butadiene market exhibited a loose supply-demand balance characterized by ongoing plant maintenance, stable market supply, and a continued accumulation of inventories; overall, there was an ample supply of spot resources. While several major domestic 1.3-butadiene production units remained offline for maintenance—keeping the industry's overall operating rate low—some units in normal operation moderately increased their production loads. This effectively offset the supply reduction caused by maintenance, resulting in a stable overall market supply. Meanwhile, the pace of downstream consumption remained sluggish, and port inventories in East China continued to build up; the combination of steady domestic supply replenishment and slowed downstream offtake further exacerbated the loose spot market conditions. Currently, major producers primarily rely on long-term contract sales, yet the volume of spot goods available for external sale has increased, and intermediary inventories have steadily risen. Consequently, the industry faces mounting pressure to move stock, prompting some traders to offer price concessions to stimulate transactions and accelerate inventory reduction.
Dongming Petrochemical's 50,000-ton/year 1.3-butadiene unit is operating normally; 280 tons are being offered for sale with a reserve price of 8,800 RMB/ton.
Satellite Chemical's 90,000-ton/year 1.3-butadiene unit is operating normally; 336 tons are being offered for sale with a starting price of 8,800 RMB/ton.
Demand Side:
Overall downstream demand for 1.3-butadiene remained weak this week. Several key downstream industries are generally operating at a loss, resulting in low enthusiasm for production and raw material procurement, which continues to suppress the 1.3-butadiene market. The tire industry has entered its traditional off-season; with shrinking order volumes and a significant buildup of finished product inventories, domestic tire manufacturers are operating at low capacity utilization rates. Producers of BR (PBR), facing profit pressures, have voluntarily cut production and lowered operating rates, limiting their 1.3-butadiene procurement to minimal levels required for essential operations while strongly pushing for lower purchase prices. The SBS and ABS sectors are facing even more severe losses; operating rates have plummeted, and the volume of essential demand has contracted significantly. Downstream enterprises are generally adopting a "wait-and-see" approach in anticipation of price drops, resulting in extremely low willingness to purchase raw materials. Only the styrene-1.3-butadiene latex (SBL) segment shows a small amount of essential procurement demand. Overall market trading is sporadic, with no signs of concentrated restocking, and the demand side is entirely unable to provide support or upward momentum for 1.3-butadiene prices. As of June 25, the BR market in East China was consolidating at low levels. Amidst slight fluctuations in international crude oil prices and downstream inquiries limited to immediate needs, spot market offers for BR saw minor adjustments. Currently, Daqing and Yangzi PBR are quoted at 13,300-13,550 RMB/ton, while some private brands are quoted around 13,100-13,300 RMB/ton.
Market Outlook:
From a fundamental perspective, the market currently lacks cost support; spot inventories are accumulating, and supply remains relatively ample. Meanwhile, downstream industries are in their traditional off-season, resulting in sluggish overall demand and a strong "wait-and-see" sentiment among buyers. Bearish factors dominate the market, and while limited unit maintenance provides slight support, it is insufficient to offset the prevailing downward pressure. Consequently, the domestic 1.3-butadiene market is expected to continue its weak, fluctuating trend in early July, with potential for a slight decline. Future market performance will hinge on crude oil price trends, the pace of downstream restocking, unit maintenance schedules, and changes in port inventory levels.
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