The domestic butadiene market price first rose and then fell in April (202104)

1. This month's core tips and quick overview of trends

◆ Sinopec butadiene supply price dynamics

At the end of April, the supply price of butadiene from Sinopec East China Sales Company was 7,300 CNY/ton at the beginning of the month, and the price was reduced by 400 CNY/ton to 6,900 yuan/ ton.

◆ The domestic market rose first and then fell

In April, the domestic butadiene market price first rose and then fell. Since the number of domestic parking maintenance manufacturers increased in April, the start-up load of enterprises has fallen, and the external price has risen strongly. This good news lead the market offered price to be stable with a slight increase. However, due to the weak decline in the downstream synthetic rubber market, the enthusiasm for purchasing raw materials is weak, and the high-end transactions were not smooth. Moreover, some manufacturers have lowered their quotations, and it limits market price to rebound. On the whole, the enterprise equipment maintenance is relatively concentrated. However, the circulation of the goods is not smooth, and the supply side provides insufficient supports due to the accumulation of early inventory and the poor enthusiasm of the downstream to get the goods. In the absence of the support of favorable factors, the weak market conditions are mainly organized. Near the end of the month, part of the downstream required the replenishment on bargain prices before the holiday. The external and supplier prices are firm, so it can support some merchants to reluctantly sell at low prices. However, the supply of goods is adequate, and the downstream rubber market is operating weakly. Therefore, it is difficult to form a significant supportive effect on the butadiene market, and the market mainly organized in a stalemate. It is expected that the butadiene market will be looking for a direction in a slight consolidation in May.

 2. Summary of the Current Period Market

Figure 1. The price trend of butadiene in the international market

Table 1, List of closing prices of butadiene external disk

2.2 Domestic Market

Figure 2. The price trend of butadiene in the domestic market

 Table 2. Monthly comparison of butadiene market prices

In April, the domestic butadiene market price first rose and then fell, the increase was greater than the decline, mainly due to the number of domestic shutdown factories increased since April. Yanshan Petrochemical, Fushun Petrochemical, Maoming Petrochemical, Shanghai Petrochemical, Inner Mongolia Jiutai, and Silbang Petrochemical, etc. focused on maintenance. The start-up load of enterprises has decreased, and the external price has risen steadily. Thus, the market quotations rose steadily, but due to the weak downturn in the downstream synthetic rubber market, the start-up load decreased, the enthusiasm for purchasing raw materials is weak, the high-end transactions are not smooth, and the quotations of some manufacturers are lowered. It caused the market prices to rebound limitedly. Overall, although the company’s equipment maintenance is relatively concentrated, the accumulation of early inventory and the inactive acquisition of goods from downstream results poor supply of goods, slow inventory digestion, and insufficient support on the supply side. Under the inadequate support of benefits, the weak market conditions are mainly organized. Towards the end of the month, some downstream replenishments were sporadic before the holiday, external and supplied prices performs strongly, supporting some merchants to reluctantly sell at low prices, but due to the abundant supply in the market and the weak downstream rubber market, it is difficult to form an obvious positive support for the butadiene market, and the market mainly organized in a stalemate.  As of April 30, the price offered by Shandong Province is around RMB 7,400/ton, down by RMB 250/ton from the end of last month, a drop of -3.27%; the reference price of Jiangsu and Zhejiang province is 7,000 CNY/ton, down by 200 CNY/ton from the end of last month, or -2.78%. Near the May Day Holiday, the market trading is quiet. After the holiday, the demands of retail investors may have some supports for the market, but the performance of butadiene supply side is abundant, and the supply and demand fundamentals have no sustained positive release in May. It is expected that the butadiene market will be looking for a direction in a slight consolidation in May. It is recommended to pay attention on the inside and outside market trends and changes in domestic supply and demand.

 3. The Next Market Trend and Forecast

4. Charts and detailed data

4.1 Ex-factory price statistics of butadiene

  Table 4. The monthly ex-factory price of butadiene rose and fell

4.2 Statistics of import and export data (by country of origin in March)

 Table 5, Statistics of butadiene imports in March 2021

4.3 Statistics of device operation

 Table 6, Operating dynamics of butadiene plant

As of the end of this month, some domestic large-scale butadiene manufacturers are operating relatively stably.