SunSirs: Supply Was Tight, and the Butadiene Market Was on the Rise

Price trend

According to the Commodity Market Analysis System of SunSirs, the domestic butadiene market fluctuated and fell this week. From July 7th to July 14th, the domestic butadiene market price increased from 8,600 RMB/ton to 9,166 RMB/ton, with a price increase of 6.59% during the cycle. The domestic butadiene market fluctuated upward in this cycle, with low port inventory and slightly tight supply in recent times. With the increase in auction premium transactions of main refineries, the mentality of the spot market had strengthened, driving market quotations to rise all the way. From the demand side, downstream companies showed good intentions to replenish inventory in the recent times, which provided some support for market sentiment. As of July 14th, the self pickup price in East China was around 9,100 RMB/ton.

Analysis review

Cost side: The international crude oil market mainly fluctuated within the range of this cycle, with frequent fluctuations and limited impact on downstream markets. Market influencing factors had returned to the supply and demand side. As of July 11th, the settlement price of the August contract for WTI crude oil futures in the United States was $68.45 per barrel. The settlement price of Brent crude oil futures for September was $70.36 per barrel.

Supply side: The listed price of butadiene for various sales companies of Sinopec was 9,200 RMB/ton, with an increase of 300 RMB/ton this week.

The 160,000 tons/year butadiene unit of Fushun Petrochemical was operating normally and there were no plans for export at the moment.

The 50,000 tons/year butadiene unit of Dongming Petrochemical was operating normally, with 168 tons exported and a base price of 9,200 RMB/ton.

The 200,000 tons/year butadiene plant of Yantai Wanhua was operating normally, with 448 tons exported and a base price of 8,800 RMB/ton.

Demand side: According to the commodity market analysis system of SunSirs, the market price of butadiene rubber has slightly increased recently. As of July 11th, the price of Shunding rubber by PetroChina East China Sales Company had been raised by 300 RMB/ton: Dushanzi Shunding quoted 11,700 RMB/ton, Daqing Shunding quoted 11,700 RMB/ton, Sichuan Shunding quoted 117,00 RMB/ton, and the East China warehouse raised prices.

Market outlook

The recent trend of crude oil has been volatile, with insufficient guidance for the butadiene market and minimal impact. This week's trend was mainly influenced by supply and demand. From the supply side perspective, some domestic facilities have undergone maintenance, and there have been few recent ship arrivals, leading to slightly tight market expectations for supply. On the demand side, the overall downstream demand tended to be rigid, and downstream consumers had a strong resistance to high priced raw materials. Overall, it is expected that the butadiene market will continue to face significant upward resistance, mainly with a range oscillation trend.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.