SunSirs: Demand Changed, Butadiene First Fell and Then Rose

Price trend

According to the SunSirs’ Commodity Market Analysis System, the domestic butadiene market experienced a period of decline followed by a rebound last week, with an overall upward trend. From August 8th to 15th, the domestic butadiene market price rose from 9,100 RMB/ton to 9,166 RMB/ton, a 0.73% increase over the period. The market was relatively stable at the beginning of the week, but in mid-week, boosted by rising downstream markets, the spot market began to improve. Major domestic refineries raised their ex-factory prices, leading to a slight recovery in spot prices. By the weekend, however, due to continued demand from downstream buyers, market support was limited, and spot prices generally retreated. As of August 15th, the delivered price in central Shandong was between 9,300 and 9,500 RMB/ton.

Analysis review

Cost: Crude oil prices had been range-bound this cycle. 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, negative news for the oil market. Furthermore, the impact of Middle Eastern geopolitical tensions, negative global macroeconomic data, and the impending summer off-season in the United States are likely to continue weighing on crude oil prices. As of August 14th, the September WTI crude oil futures contract settled at $63.96 per barrel. The October Brent crude oil futures contract settled at $66.84 per barrel.

On the supply side: Sinopec's butadiene sales companies were maintaining a listed price of 9,400 RMB/ton, unchanged.

Fushun Petrochemical's 160,000 tons/year butadiene unit was operating normally and had been shut down with no plans for export. It is expected to restart in October.

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

Satellite Chemical's 90,000 tons/year butadiene unit was operating normally, with a price reduction of 150 RMB/ton to 9,200 RMB/ton.

On the demand side: According to the SunSirs’commodity market analysis system, as of August 15th, the market for butadiene rubber (BR) saw a slight upward trend. Downstream demand inquired, and market sentiment rebounded, BR futures prices fluctuated and consolidated, with transactions primarily in small orders, and dealers' quotes rising slightly by around 50 to 100 RMB/ton. As of August 15th, the mainstream BR prices in Sichuan, Dushanzi, and Lande were between 11,700 and 11,800 RMB/ton.

Market outlook

Fushun Petrochemical's plant underwent maintenance last week and is expected to resume in October. However, recent import supplies were relatively plentiful, limiting positive supply-side factors. On the demand side, the downstream rubber market was performing well, providing some support, but overall demand remained based on just-in-time purchases. Overall, the butadiene market faces limited positive supply and it is expected that the market will mainly fluctuate within the range in the future.

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