Supply Changes: Butadiene First Falls, Then Rises

August 11th, news:

According to the commodity market analysis system, the Chinese butadiene market first declined and then rose this week, with an overall upward trend. From August 4 to August 11, the price of butadiene in China increased from 9,050 CNY/ton to 9,083.33 CNY/ton, a rise of 0.37% during the period. The butadiene market showed a slightly volatile trend with a small increase this cycle. On the supply side, some facilities in China were restarted, but there were also some undergoing maintenance, resulting in a slight decline in overall supply. Facilities in Shandong have not yet started external sales, leading to a generally tight supply. On the demand side, the initial price drop attracted some downstream buyers to replenish their inventories, but this was only a temporary demand. Overall, demand remains primarily driven by necessity, providing limited support.

Cost Aspect: As of the 8th, the settlement price for the September contract of U.S. WTI crude oil futures was reported at $63.88 per barrel, while the settlement price for the October contract of Brent crude oil futures was reported at $66.59 per barrel. Negative factors in the crude oil market include OPEC+ announcing that it has completed cumulative production increases totaling 2.3 million barrels per day by September, marking the organization's early exit from its over two-year plan to reduce production by more than 2.2 million barrels per day. This news is bearish for the oil market. Additionally, geopolitical tensions in the Middle East continue to affect the oil market, and negative global macroeconomic data, combined with the approaching off-season demand period in the U.S. summer, will further weigh on crude oil prices.

Supply side: The listed price of butadiene from Sinopec's sales companies is 9,400 CNY per ton.

Fushun Petrochemical's 160,000-ton/year butadiene plant is operating normally, with 210 tons sold externally. The auction floor price was 8,750 CNY/ton, and the transaction price was 8,970-8,980 CNY/ton.

Shenghong Petrochemical's 200,000 tons/year butadiene plant is operating normally, with a price increase of 150 CNY/ton, now at 9,300 CNY/ton.

Satellite Chemical's 90,000 tons/year butadiene plant is operating normally, with an increase of 100 CNY/ton, and the price is now 9,300 CNY/ton.

Demand Side: According to the commodity market analysis system, as of August 11, the butadiene rubber market in East China showed a slight upward trend. Downstream buyers are inquiring about necessary purchases, and the market sentiment is improving, with spot market traders raising their offers by 100~150 CNY/ton. Currently, the main quotes for Daqing, Yangzi, and Qilu butadiene are around 11,800~12,200 CNY/ton; some private brands are quoted at around 11,600~11,850 CNY/ton.

Market Forecast: Recently, crude oil prices have shown a weak and fluctuating trend, providing insufficient guidance to the butadiene market and having limited impact. This week's market performance will continue to be influenced by supply and demand fundamentals. On the supply side, some production facilities have recently resumed operations, leading to weaker market sentiment. On the demand side, downstream synthetic rubber futures remain relatively weak, exerting some downward pressure on spot market sentiment. Overall, the supply-demand situation is generally bearish, resulting in a stable-to-weak market trend with limited fluctuations.

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