According to the Commodity Market Analysis System of Shengyi Society, from August 30th to September 6th, the domestic butadiene market price increased from 12925 yuan/ton to 12937 yuan/ton, with a price increase of 0.1% during the period. This week, the overall butadiene market experienced narrow fluctuations, with market prices falling, but the overall magnitude was limited. Sinopec’s butadiene price remains stable at 13000 yuan/ton. During the week, some of the goods arrived at the port and some were exported to the northern region. At the same time, some of the goods were sold in the northern region, alleviating the problem of tight supply in the northern market. The downstream market demand has remained lukewarm, with limited support for market sentiment, resulting in a general decrease in market prices this week. As of September 6th, the self pickup price of butadiene from the tank in East China is between 12550-12600 yuan/ton, a decrease of 100-150 yuan/ton compared to last week.
Cost aspect: During this cycle, the crude oil market has declined, partly due to the easing of tensions in the Middle East. Libya announced that it is expected to resolve restrictions on crude oil exports, easing the tight supply of crude oil and causing a significant drop in international oil prices. On the other hand, there are concerns that China’s crude oil demand may not meet expectations, coupled with the end of the peak oil season in the United States, which will drag down the crude oil market. As of September 5th, the settlement price of the main contract for WTI crude oil futures in the United States was $69.15 per barrel. The settlement price of the main Brent crude oil futures contract is $72.69 per barrel.
Supply side: The comprehensive operating rate in China has not changed much recently, and it has remained stable with a slight decrease this week. Currently, the domestic supply of butadiene has limited changes.
Demand side: The downstream synthetic rubber market has slightly rebounded this week, with a narrow range of market fluctuations. Currently, downstream demand is weak, market trading is flat, supply prices are firm, and merchant offers have slightly consolidated.
On Thursday (September 5th), the closing price of butadiene in the foreign market was mixed: among them, the FOB price in South Korea was reported at 1450-1460 US dollars/ton, unchanged; China’s CFR report ranges from $1490-1500 per ton, with an increase of $15 per ton; European butadiene FOB Rotterdam closed at 1110-1120 US dollars/ton, unchanged; FD Northwest Europe closed at 1050-1060 euros/ton, down 35 euros/ton.
Market forecast: With an increase in incoming goods, the current tight supply situation in the market has been alleviated to some extent. However, the downstream market has remained stable and weak. Although enterprise profits have been somewhat restored after price increases, overall demand is still biased towards rigid demand, and on-demand replenishment is maintained as the main strategy. Overall, it is expected that the butadiene market will experience a weak and volatile trend in the short term under the pattern of weak supply and rigid demand.
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