Macro news drags down domestic butadiene market

In March, the global epidemic spread, crude oil plunge, US stocks meltdown and other macro news dragged down, the domestic butadiene market weakened. As of March 24, the price of butadiene in the Shandong market was 5600-5700 CNY/ton, down 11.11% from the beginning of the month, and the price of butadiene in the East China market was 5700-5800 CNY/ton, down 8.06% from the beginning of the month. As the price of butadiene continues to fall, the current price has approached the lowest point since 2008, the market supply and demand contradiction has not diminished, the drag market is difficult to improve.

On the supply side, most of the butadiene units supporting large ethylene currently maintain normal operation. Although some butadiene units such as Silbang Petrochemical, Inner Mongolia Jiutai and Shenhuaning Coal are under certain maintenance, they have little effect on the overall output. In terms of port inventory, although affected by the epidemic, butadiene imports are limited, but downstream consumption is slow, resulting in unreduced inventory pressure in the tank farm. Overall, the domestic butadiene market has ample spot supply.

On the demand side, under the influence of the global epidemic, some automobile manufacturing plants were closed, resulting in weakened tire demand, which led to a reduction in the demand for synthetic rubber. The purchase intention of olefin is limited, and the enthusiasm for downstream inquiry is not high.

Although in April, some butadiene units are expected to be overhauled and overhauled, the market supply or storage may be reduced, but the downstream demand has not improved significantly, and the market may not have a clear demand gap. More considerations may be given to supporting merchants ’mentality. The impact is relatively large. It is expected that the domestic butadiene market will rebound slightly in April after a narrow range of consolidation, but there is little room for rebound under the drag of the economic environment. It is recommended that industry players still need to pay attention to the guidance of external macro policy news and changes in domestic supply and demand fundamentals.