Demand Fluctuations Drive Butadiene Market to Soar in August

August 29 update

According to the commodity market analysis system, the butadiene market in China fluctuated and rose in August 2025. From August 1st to 29th, the price of butadiene in China increased from 9,050 CNY/ton to 9,283.33 CNY/ton, with a price increase of 2.58% during the period.

In the first half of the month, the butadiene market experienced volatile movements with a slight upward trend. On the supply side, some production units in China resumed operations, while others underwent planned maintenance. Overall, however, supply levels edged slightly downward. Notably, plants in Shandong province have yet to begin external sales, keeping the overall supply tight. Meanwhile, at the demand end, initial price declines early in the week prompted some downstream buyers to replenish their inventories at lower prices—though these were short-term purchases. As a result, overall demand remained largely driven by essential, immediate needs, with limited long-term support from the demand side.

Late period: The market trend in this cycle was volatile. Starting from mid-month, it was boosted by the rise in the downstream market, and the spot market atmosphere began to improve. Major refineries in China raised their factory prices one after another, leading to a slight recovery in spot market prices. Later, due to the downstream still being in a state of rigid demand procurement, the support for the market was limited, and spot prices generally adjusted downward. By the end of the month, the butadiene market strengthened with fluctuations, supported by the strengthening of synthetic rubber and favorable supply and demand conditions. As of August 28, the delivered price in the Lujian area of Shandong was between 9,550-9,630 CNY/ton.

Cost Perspective: As of the 26th, the settlement price for the U.S. WTI crude oil October contract was $63.25 per barrel, while the Brent crude oil October contract settled at $67.22 per barrel. During this pricing cycle, crude oil prices remained volatile. On one hand, OPEC+ announced that it had already achieved its cumulative production increase of 2.3 million barrels per day by September, effectively marking the group’s early exit from its more than 2.2 million bpd production cut plan—one year ahead of schedule. This news weighed negatively on the oil market. On the other hand, escalating tensions in Europe and subsequent peace talks have eased geopolitical supply risks, while weak global macroeconomic data, coupled with expectations of a rate cut by the Federal Reserve in September, have further dampened bullish sentiment in the crude oil market.

Supply side: The listed prices for butadiene from Sinopec's various sales companies were set at 9,500 CNY/ton as of the 29th, an increase of 100 CNY/ton compared to the same period last month. Recently, the overall operating rate of the butadiene industry in China has remained relatively stable, with supply generally steady.

The 160,000 tons/year butadiene plant of Fushun Petrochemical in China is operating normally. It will be shut down for maintenance starting from August 14, with no plans for external sales. The restart is expected in October.

Shenghong Petrochemical's 200,000 tons/year butadiene unit is operating normally, with a price increase of 100 CNY/ton, now priced at 9,400 CNY/ton.

Satellite Chemical's 90,000 tons/year butadiene plant in China is operating normally, with an increase of 100 CNY/ton, and the price is now 9,350 CNY/ton.

Demand Side: In August, the market for butadiene rubber in China saw a slight increase. According to the commodity market analysis system, as of August 28, the price of butadiene rubber in the East China region was 12,200 CNY/ton, up 2.01% from 11,960 CNY/ton at the beginning of the month. The price of raw material butadiene fluctuated and increased, shifting the cost center of butadiene rubber upwards; the production of butadiene rubber slightly fluctuated, with no significant supply pressure; downstream tire production slightly increased, mainly supported by the rigid demand for butadiene rubber. As of August 28, the mainstream prices for Qilu, Daqing, Sichuan, and Yangzi butadiene rubber in the East China region were 11,900 to 12,400 CNY/ton.

Market Outlook: Recently, the supply side in China has been performing reasonably well, with an overall slightly loose situation that has had limited impact. The demand side has seen a general strengthening of the synthetic rubber market, with good support from downstream sectors. Influenced by this demand support, it is expected that the butadiene market in China will mainly show a stable and relatively strong trend in the short term.