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 rose last week. From July 14th to July 21st, the domestic butadiene market price increased from 9,166 RMB/ton to 9,400 RMB/ton, with a price increase of 2.55% during the cycle. The domestic butadiene market had fluctuated upward in this cycle, and port inventories in East China were running at a low level recently, boosting market sentiment. During the week, mainstream refineries in China generally transacted at a premium, further strengthening market sentiment and causing market prices to continue to rise. The demand side showed stable performance recently and replenished inventory on demand. Boosted by favorable supply, the butadiene market rose this week.

Analysis review

On the cost side: During this cycle, crude oil prices fluctuated at a low level. On the one hand, OPEC+ is likely to maintain a significant increase in production in August and September, and the tension in the Middle East had eased compared to before. As a result of this news, the international oil market trend declined; On the other hand, the market's concerns about the US tariff negotiations had eased to some extent, and major institutions had a pessimistic view of the demand outlook. The demand side may be difficult to change, and the crude oil market remained weak. As of July 18th, international crude oil futures closed down. The settlement price of the September WTI crude oil futures contract in the United States was $66.05 per barrel. The settlement price of Brent crude oil futures for September was $69.28 per barrel.

Supply side: The listed price of butadiene for various sales companies of Sinopec was 9,400 RMB/ton, with an increase of 200 RMB/ton last week.

The 160,000 tons/year butadiene unit of Fushun Petrochemical was operating normally and was not exported temporarily. The quotation was temporarily suspended.

The 50,000 tons/year butadiene unit of Dongming Petrochemical was operating normally, with 168 tons exported and a base price of 9,400 RMB/ton.

Shenghong Refining's 200,000 tons/year butadiene plant was operating normally, with an increase of 150 RMB/ton and an implementation of 9,500 RMB/ton.

Demand side: According to the Commodity Market Analysis System of SunSirs, the butadiene rubber market has been fluctuating downward recently, with slight fluctuations in the Shunding rubber market in East China. Downstream essential procurement was the main focus, market transactions were mainly small orders, and individual offers from spot market merchants had slightly increased. As of July 18th, the mainstream quotations for Daqing, Yangtze, and Qilu Shunding were 11,750-12,000 RMB/ton; Some private brands were priced around 11,600~11,800 RMB/ton.

Future outlook:

Recently, the trend of crude oil has been weak and volatile, with insufficient guidance for the butadiene market and minimal impact. Last week's trend was still influenced by supply and demand. From the supply side perspective, there were fewer ship arrivals in the East China region recently, and the market expects a slightly tight supply. From the demand side, the overall downstream demand was still acceptable. Overall, it is expected that the supply side of the butadiene market will be supported by favorable conditions, with a focus on stable and stronger operations.

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