SunSirs: Supply Changed, Butadiene First Fell and Then Rose

Price trend

According to SunSirs’ Commodity Market Analysis System, the domestic butadiene market experienced an initial decline last week, followed by a rebound, with an overall upward trend. From August 4th to 11th, the domestic butadiene market price rose from 9,050 RMB/ton to 9,083.33 RMB/ton, a 0.37% increase over the previous period. The butadiene market saw a volatile period with slight increases. On the supply side, some domestic plants restarted, while others were undergoing maintenance, resulting in a slight decline in supply. Plants in Shandong were not temporarily exporting, leaving overall supply tight. On the demand side, the early-week price decline attracted some downstream buyers to restock at a lower price, but this was a temporary surge, and overall demand remained relatively rigid, resulting in limited support from the demand side.

Analysis review

Cost: As of the 8th, the September contract for WTI crude oil futures settled at $63.88 per barrel. The October contract for Brent crude oil futures settled at $66.59 per barrel. Negative factors weighed on the crude oil market. OPEC+ announced a cumulative production increase of 2.3 million barrels per day (bpd) by September, marking the organization's exit from its planned production cuts of over 2.2 million bpd a year ahead of schedule. This news was also bearish for the oil market. Furthermore, the geopolitical situation in the Middle East, negative global macroeconomic data, and the impending summer off-season in the US were impacting the oil market. This, coupled with fundamental factors such as the impending US summer demand slowdown, will continue to pressure crude oil prices.

Supply side: The listed price of butadiene by Sinopec sales companies was 9,400 RMB/ton.

Fushun Petrochemical's 160,000 ton/year butadiene unit was operating normally, with 210 tons exported. The base price was 8,750 RMB/ton, and the final price was 8,970-8,980 RMB/ton.

Shenghong Refining and Chemical's 200,000 ton/year butadiene unit was operating normally, with a price increase of 150 RMB/ton to 9,300 RMB/ton.

Satellite Chemical's 90,000 ton/year butadiene unit was operating normally, with a price increase of 100 RMB/ton to 9,300 RMB/ton.

On the demand side: According to SunSirs’commodity market analysis system, as of August 11th, the market for butadiene rubber in East China saw a slight upward trend. Downstream demand inquired, market sentiment rebounded, and spot market traders raised their prices slightly by 100-150 RMB/ton. As of August 11, mainstream butadiene prices in Daqing, Yangzi, and Qilu were between 11,800 and 12,200 RMB/ton, while some private brands were priced around 11,600-11,850 RMB/ton.

Market outlook

Crude oil has recently been weak and volatile, providing limited guidance and impact on the butadiene market. Last week's market trends remained driven by supply and demand. On the supply side, the recent restart of some plants has weakened market sentiment. Demand remained rigid, and the downstream synthetic rubber futures market was weak, weighing on spot market sentiment. Overall, the supply and demand picture is bearish, with the market primarily performing steadily but weakly in the near future, with limited volatility overall.

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