SunSirs: Lack of Support, Butadiene Market was Operating to be Weaker

Price trend

According to the Commodity Market Analysis System of SunSirs, the domestic butadiene market fluctuated and fell this week. From June 30th to July 7th, the domestic butadiene market price decreased from 9,066.67 RMB/ton to 8,600 RMB/ton, with a price drop of 5.15% during the cycle. The butadiene market fluctuated downward this cycle, dragged down by insufficient demand, and the ex factory prices of main refineries were lowered one after another in the later part of the week. The spot market supply on the supply side had been relatively sufficient recently, and the main production areas were actively exporting. There were some unsold transactions in the market, and market transactions were slightly weak. As of July 7th, the delivery price in the Shandong market was around 8,800-8,850 RMB/ton.

Analysis review

Cost side: The international crude oil market had fluctuated and risen this cycle. As of July 4th, the US WTI crude oil futures were closed for the Independence Day holiday, and the September Brent crude oil futures contract settlement price was $68.30 per barrel.

Supply side: The listed price of butadiene for various sales companies of Sinopec was 8,900 RMB/ton, which will be lowered by 500 RMB/ton this week.

Fushun Petrochemical's 160,000 tons/year butadiene plant was operating normally and had no export sales. Therefore, no quotation was provided at this time.

The 50,000 tons/year butadiene unit of Dongming Petrochemical is operating normally, with 280 tons exported at a base price of 8,500 RMB/ton.

The 90,000 tons/year butadiene unit of Satellite Chemical Lianyungang Petrochemical was operating normally, with a reduction of 100 RMB/ton and an implementation of 8,600 RMB/ton.

On the demand side: According to the Commodity Market Analysis System of SunSirs, the recent butadiene rubber market has been weak and declining, while the futures market for butadiene rubber had been weak and volatile. The supply price of butadiene rubber was temporarily stable, and there had been a slight adjustment in merchant offers. As of July 4th, the mainstream reports for Daqing, Yangtze, and Qilu Shunding were 11,650-12,000 RMB/ton; Some private brands were priced around 11,450-11,700 RMB/ton.

Future outlook:

The recent trend of crude oil has been volatile, with insufficient guidance for the butadiene market and minimal impact. This week's trend mainly returned to the impact of supply and demand. From the supply side perspective, refineries in major domestic production areas were actively shipping, and the market supply was relatively sufficient. On the demand side, the overall downstream demand tended to be rigid. Under the pattern of strong supply and weak demand, it is expected that the overall trend of the butadiene market will be volatile and weaker.

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