What exactly has the butadiene market experienced in the second half of 2020?

Recently, the domestic butadiene market has continued to push up. Major manufacturers have raised their ex-factory quotations several times within a week. Traders can’t keep up with the rising mentality. The butadiene market quotations in some areas have exceeded 10,000 CNY/ton. According to the monitoring data of the business agency, the domestic butadiene price market has steadily increased since the second half of 2020, and the entire industry chain has been booming. On July 1, 2020, the domestic butadiene ex-factory average price was 3445 CNY/ton, as of 2020 On October 26, 2010, the domestic average ex-factory price of butadiene was 9,200 CNY/ton, an increase of 167.01% during the cycle, and the price reached a new high this year.

What happened to butadiene in the second half of 2020:

At the beginning of July, the closing price of butadiene in Asia, Europe and the United States rose intermittently. By September 2020, the number of days of increase in the price of the external disk in the month will reach 12 days. Entering October, the closing price of the external disk has risen for 10 days. Take CFR China as an example. CFR China closed at US$365-375/ton on July 1, and CFR China closed at US$1035-1045/ton on October 23. The price rose sharply by 670 CNY/ton, an increase of 183.56%. The good news on the external market has injected a boost from the long-term downturn in the domestic butadiene market in the first half of the year. During this period, traders actively followed up to create a situation where fewer goods were hard to find, and domestic butadiene prices continued to rise.

In terms of major production companies, taking Sinopec’s sales companies as an example, according to the monitoring data of the business agency, the external supply price of Sinopec’s sales companies was 3,600 CNY/ton on July 1, reaching the lowest point in the year. As of October 26, Sinopec’s sales companies The sales company's external supply price was 9,200 CNY/ton, an increase of 155.6%, which had a significant boost to the market. Other major production companies in Northeast China, such as Fushun Petrochemical and Liaotong Petrochemical, will temporarily not export butadiene for self-use for a long time. In addition, on October 20, Sinopec Huazhong Sales Branch Wuhan Ethylene 130,000 tons/year plant shut down Overhaul, seriously affecting the social inventory of butadiene. Other companies such as Liaoyang Petrochemical, Dalian Hengli, and Inner Mongolia Jiutai's ex-factory quotations have also been rising. For a time, the butadiene market situation is difficult to control, and there are many cases of random quotations by traders.

On the other hand, due to the positive impact of the rising natural rubber futures, the price of butadiene downstream synthetic rubber has risen significantly, and the entire industrial chain has been positively linked, which has promoted the butadiene market to rise repeatedly. Starting from the second half of 2020, the demand for rubber has recovered strongly. The downstream tire industry and rubber products industry of synthetic rubber have gradually recovered, and the output has gradually recovered, and demand will support synthetic rubber. Taking domestic tire production as an example, the year-on-year data of domestic tire and tire production fell by 27.2% year-on-year from the beginning of the year, and gradually rebounded to 5.5% at the end of September. This shows the strength of domestic rubber downstream recovery. According to the business agency, the domestic output of rubber tires from January to February 2020 was 80.865 million, a year-on-year decrease of 27.2%; the cumulative domestic output of rubber tires from January to June 2020 was 35.678 million, a year-on-year decrease of 12.1%; in 2020 The cumulative output of domestic rubber tires from January to September was 582.541 million, a year-on-year decline of 5.5%.

Up to now, the butadiene market has been slowly digesting the chasing sentiment and gradually transitioned to a stable state of consolidation. External disk prices continue to rise at a high level, the domestic market is weak to catch up, natural rubber futures are strong, and upstream and downstream products continue to rise strongly. Butadiene analysts predict that the domestic butadiene market will be mainly consolidated in the short term.