Demand Changes Lead to Initial Drop and Then Rise in Butadiene Prices

August 15th News

According to the commodity market analysis system, the Chinese butadiene market this week first declined and then rose, with an overall upward trend. From August 8 to August 15, the price of butadiene in China increased from 9,100 CNY/ton to 9,166 CNY/ton, a rise of 0.73% during the period. At the beginning of the week, the market trend was relatively stable. By mid-week, driven by the rise in the downstream market, the spot market sentiment began to improve, and major refineries in China raised their factory prices, leading to a slight recovery in spot market prices. By the end of the week, due to the continued rigid demand procurement in the downstream, the support for the market was limited, and spot prices generally adjusted downward. As of August 15, the delivered price in the central Shandong region was between 9,300 and 9,500 CNY/ton.

Cost Aspect: During this period, crude oil prices mainly fluctuated within a range. On one hand, OPEC+ announced that it had completed the cumulative production increase of 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, which was bearish for the oil market. On the other hand, geopolitical tensions in the Middle East continued to affect the oil market. Additionally, negative global macroeconomic data and the approaching off-season for summer demand in the United States further pressured crude oil prices. As of August 14, the settlement price for the September contract of U.S. WTI crude oil futures was reported at $63.96 per barrel, while the settlement price for the October contract of Brent crude oil futures was reported at $66.84 per barrel.

Supply side: Sinopec's various sales companies are maintaining the butadiene listed price at 9,400 CNY/ton, unchanged.

Fushun Petrochemical's 160,000 tons/year butadiene plant is operating normally, but it has been shut down, and there are no current plans for external sales. It is expected to restart in October.

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

Satellite Chemical's 90,000 tons/year butadiene plant in China is operating normally, with a price reduction of 150 CNY/ton, now at 9,200 CNY/ton.

Demand Side: According to the commodity market analysis system, as of August 15th, the styrene-butadiene rubber (SBR) market showed a slight upward trend. Downstream markets were actively inquiring about supplies, leading to a warming atmosphere. SBR futures prices fluctuated and consolidated, with transactions mainly consisting of small orders. Traders slightly raised their quotes by approximately 50-100 CNY/ton. Currently, mainstream quotations for SBR from suppliers such as Sichuan, Dushanzi, and Landes are around 11,700–11,800 CNY/ton.

Market Forecast: This week, Fushun Petrochemical is undergoing plant maintenance and is expected to resume operations in October. However, imported supply has been relatively sufficient recently, limiting the upside potential from the supply side. On the demand side, downstream rubber markets have performed well, providing some support to the market, but overall procurement remains rigid. Overall, considering both supply and demand, the butadiene market faces limited positive factors, and it is expected to mainly fluctuate within a narrow range in the coming period.

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