SunSirs: Driven by Tight Supply and Demand Conditions, 1,3-Butadiene Prices Surged in March

Price trend

According to monitoring by the SunSirs Commodity Market Analysis System, the domestic 1,3-butadiene market experienced volatile upward movement in March 2026. From March 1 to March 31, domestic 1,3-butadiene market prices rose from 9,993.33 RMB/ton to 18,066.67 RMB/ton, marking an increase of 80.79% over the period.

In March 2026, the domestic 1,3-butadiene market generally exhibited a trend characterized primarily by strong upward surges, interspersed with brief corrections. The bullish momentum persisted throughout the entire month; strengthening production costs, coupled with tightening supply—a confluence of bullish factors—provided robust support for prices to surge significantly, even in the face of relatively weak follow-through demand from downstream sectors. Although brief, minor price pullbacks occurred during this period, they failed to alter the overall upward trajectory of the market.

Analysis of Key Influencing Factors

Cost Perspective:

In March, the cost side emerged as the primary driver behind the price surge in 1,3-butadiene. The escalating geopolitical conflict in the Middle East sparked concerns regarding global crude oil supplies, causing international oil prices to spike sharply and subsequently trade at elevated levels. As a byproduct of ethylene cracking, 1,3-butadiene production capacity relies heavily on the naphtha cracking route; consequently, its pricing is deeply correlated with the price trends of crude oil and naphtha. The sharp rise in crude oil prices directly drove up overall costs across the refining and petrochemical value chain; simultaneously, the strengthening of naphtha prices led to a rigid upward shift in 1,3-butadiene production costs. Furthermore, disruptions to shipping and logistics further inflated the cost of imported raw materials, placing operational pressure on refining and petrochemical enterprises and thereby indirectly reinforcing the fundamental support from the raw material side. As of March 31, the settlement price for the May contract of US WTI crude oil futures stood at $101.38 per barrel, while the settlement price for the June contract of Brent crude oil futures was $103.97 per barrel.

Supply Side:

This month, several major domestic 1,3-butadiene production units collectively entered scheduled maintenance cycles; consequently, the industry's overall operating rate continued to decline, leading to a marked contraction in spot market output. Concurrently, key production facilities across Asia experienced simultaneous reductions in output and declared *force majeure* events. Compounded by disruptions in maritime shipping channels, the volume of imported cargo arriving at domestic ports shrank significantly, resulting in insufficient replenishment of supplies. Domestic port inventories remained at persistently low levels, and circulating spot market resources became scarce. Suppliers exhibited a strong reluctance to sell—opting instead to hold back stock to support pricing—which further fueled the upward trajectory of market prices.

As of March 31, the posted price for 1,3-butadiene across Sinopec's various sales subsidiaries stands at 18,200 RMB/ton—an increase of 8,100 RMB/ton compared to the price of 10,100 RMB/ton recorded on February 28.

Dongming Petrochemical's 50,000-ton/year 1,3-butadiene facility is operating normally; 392 tons have been allocated for external sales at a floor price of 17,000 RMB/ton.

Satellite Chemical's 90,000-ton/year 1,3-butadiene facility is operating normally; the price has been raised by 500 RMB/ton, bringing the current selling price to 18,000 RMB/ton.

Demand Side:

Faced with a rapid and substantial surge in raw material prices, the downstream synthetic rubber industry chain is under significant pressure; with production margins being squeezed, most enterprises have opted to reduce operating rates as a risk-mitigation measure. Downstream end-users exhibit strong resistance to high raw material price levels, largely maintaining a procurement strategy focused on small-batch, strictly need-based orders, while showing little inclination toward bulk stockpiling. Only a few niche downstream sectors have maintained stable demand; however, this is insufficient to offset the broader pattern of weak overall demand. Consequently, the demand side remains generally sluggish, acting as a restraining factor against any potential upward movement in market prices.

In March 2026, the domestic BR market experienced a distinct, independent trend characterized by wide fluctuations and a sharp upward surge. This movement broke the previous pattern of consolidation, shifting the market's price center significantly higher over the course of the month. This rally was primarily driven by the dual factors of strong cost-side support and expectations of tightening supply, while downstream demand remained cautious in its response. Overall, the market exhibited operational characteristics defined by "cost-side floor support, suppliers holding back inventory, and follow-through driven by essential demand." According to the commodity market analysis system of SunSirs, as of March 31, market prices for BR in the East China region edged slightly lower. With international crude oil prices consolidating at high levels, the overall cost support for BR remained robust; however, the elevated price levels led to a stalemate in downstream inquiries, prompting traders to lower their quoted offers—ceding margins by 200 to 300 RMB/ton. Currently, quotes for BR from major producers such as Daqing, Yangzi, and Qilu range between 17,600 and 17,800 RMB/ton, while quotes for certain private-label brands hover around 17,400 to 17,650 RMB/ton.

Market Outlook:

On the cost front, geopolitical uncertainties persist, and the strong support provided by high crude oil prices is unlikely to dissipate rapidly in the short term. Regarding supply, the restart pace of facilities undergoing maintenance remains gradual, meaning the current tightness in the spot market is unlikely to be fully alleviated anytime soon. However, downstream sectors continue to face pressure from financial losses; consequently, there is little sign of a significant rebound in operating rates or purchasing appetite, implying that demand-side constraints will continue to weigh on the market. Overall, the recent phase of unilateral, rapid market surges may be drawing to a close as bullish and bearish forces enter a phase of balanced contention. The market is expected to primarily exhibit high-level range-bound fluctuations; future market monitoring should focus on cost volatility, the progress of facility startups and maintenance, and changes in actual transaction volumes within downstream sectors.

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