Multiple Positive Factors Support Butadiene Prices Rising Over 29% in January

January 30th News

According to the commodity market analysis system, in January 2026, the Chinese butadiene market showed a trend of first rising then falling, with an overall significant increase in prices, reaching recent highs and intensifying the supply-demand competition. From January 1st to 29th, the price of butadiene in China rose from 8,187.5 CNY/ton to 10,562.5 CNY/ton, with a price increase of 29.01% during this period, a significant rise.

This month, the market trend exhibited distinct stage-specific characteristics: after reaching a high point, it encountered resistance and began to pull back, yet overall remained firmly anchored at elevated levels. At the beginning of the month, driven by tight supply, rising international prices, and expectations of pre-holiday inventory buildup among downstream users, the market kicked off a strong upward surge. Companies showed strong willingness to hold prices steady, with quoted prices being raised repeatedly, causing prices to climb rapidly. In the middle of the month, boosted by the synchronized strength of synthetic rubber futures in downstream markets and an extremely active spot trading atmosphere, prices continued to hit new highs. Spot supplies became scarce, making it increasingly difficult to find low-priced goods. As prices surged significantly toward the end of the month, downstream users faced mounting cost pressures, putting sustained downward pressure on their profit margins. Consequently, their willingness to enter the market and make purchases noticeably declined, and high-priced transactions began to encounter resistance. The market thus experienced a temporary pullback. However, supported by the fact that supply conditions had not noticeably eased, the magnitude of the pullback was limited, and overall prices remained firmly at elevated levels throughout the month, posting a substantial increase over the course of the month.

Cost Perspective: This month, the market trend exhibited distinct phased characteristics—after reaching a peak, it encountered resistance and retreated, yet overall remained firmly anchored at high levels. At the beginning of the month, driven by tight supply, rising international prices, and expectations of pre-holiday inventory buildup among downstream users, the market kicked off a strong upward surge. Companies showed strong willingness to hold prices steady, leading to consecutive price hikes and a rapid climb in quotations. Mid-month, boosted by the synchronized strength of synthetic rubber futures in the downstream sector and an extremely active spot trading atmosphere, prices continued to hit new highs. Spot supplies became scarce, making it increasingly difficult to find low-priced goods. As prices surged significantly toward the end of the month, downstream users faced mounting cost pressures, putting sustained downward pressure on profits. Consequently, their willingness to enter the market for procurement noticeably waned, and high-priced transactions began to stall. The market thus experienced a temporary pullback. However, supported by the fact that supply conditions had not noticeably eased, the magnitude of the pullback was limited, and overall prices remained stubbornly high throughout the month. As of the 28th, the settlement price for the March contract of U.S. WTI crude oil futures stood at $63.21 per barrel, while the settlement price for the April contract of Brent crude oil futures reached $67.37 per barrel.

Supply side:

In January 2026, the butadiene supply in China continued to be tight, with plant maintenance and reduced import volumes being the key drivers. The limited availability of spot goods and the strong intention of enterprises to maintain prices led to continuous price increases. This month, multiple butadiene plants in China entered maintenance cycles, and some facilities experienced temporary shutdowns, limiting the effective capacity release and causing a contraction in domestic supply. At the same time, the available supply in the overseas market was limited, with major production regions such as South Korea and Southeast Asia also experiencing supply tightening. The volume of long-haul imported shipments arriving at Chinese ports significantly decreased, further reducing the available resources in the Chinese spot market and highlighting the tight balance between supply and demand. Against this backdrop, the main producers in China continuously raised their quotes. Sinopec's various sales companies, Satellite Chemical, Shenghong Petrochemical, and other enterprises repeatedly increased their listed or external sales prices, shifting the overall pricing system upward and further driving the market prices higher, becoming the core driver of the significant price increase this month.

Sinopec's various sales companies have set the butadiene price at 10,600 CNY/ton as of January 29, an increase of 2,300 CNY/ton from 8,300 CNY/ton on December 29.

Dongming Petrochemical's 50,000 tons/year butadiene plant is operating normally, with 336 tons sold externally at a minimum price of 10,120 CNY/ton.

The 90,000-ton-per-year butadiene unit at Satellite Chemical Lianyungang Petrochemical is operating normally. The price has been raised by 200 CNY per ton, bringing the current price to 10,400 CNY per ton.

Yantai Wanhua Chemical's Phase II 200,000 tons/year butadiene plant is operating normally, with an auction starting at 84 tons and a reserve price of 10,200 CNY/ton.

Demand Side:

In January 2026, downstream demand for butadiene in China showed a trend of initially strong and then weakening. At the beginning of the month, pre-holiday inventory buildup provided robust support, while at month-end, under growing cost pressures, demand’s ability to absorb further increases noticeably weakened, and the interplay between supply and demand gradually intensified. Earlier this month, as the Spring Festival holiday approached, the downstream synthetic rubber industry—specifically, those producing cis-polybutadiene and styrene-butadiene rubber—began stocking up ahead of the holiday. Coupled with relatively high operating rates across the industry, demand for butadiene procurement remained steady, fueling a lively spot market and serving as a key driver behind rising prices. However, as butadiene prices surged significantly, upstream synthetic rubber manufacturers faced sharply increased raw material costs. Meanwhile, price adjustments at the product end were slow to follow, causing the price spread between upstream and downstream sectors to continue narrowing. Consequently, profit margins for cis-polybutadiene and styrene-butadiene rubber producers came under considerable pressure, prompting some companies to cut back on operations. As a result, market purchasing behavior shifted from active stockpiling to merely meeting immediate needs. By month-end, high-priced transactions for butadiene encountered resistance, and the market entered a phase of temporary correction. Overall, while pre-holiday inventory buildup provided temporary support, profit pressures emerged as the core factor restraining the sustained release of demand, ultimately leading to a market rally followed by a pullback.

According to the commodity market analysis system, as of January 29, the butadiene rubber market in East China was consolidating at a high level. The futures market showed slight increases, with merchants raising their offers by 50 to 100 CNY per ton. Currently, the main quotes for butadiene from Daqing, Yangzi, and Qilu are 13,100 to 13,300 CNY per ton; some private brands are quoted around 12,950 to 13,100 CNY per ton.

Future Market Forecast:

The supply and demand dynamics in China's butadiene market will continue to dominate the trend, with prices likely to maintain a high-level fluctuation. The tight supply situation is unlikely to be fundamentally alleviated in the short term, and factors such as plant maintenance and reduced imports will continue to support prices. Enterprises still have a strong intention to maintain high prices, leaving limited room for price adjustments. On the demand side, the pressure on downstream profits has not improved, and the tire industry, the end-user, is still in a seasonal low period. As the pre-holiday stocking demand gradually fades, the follow-up of rigid demand will be limited, restraining further price increases and making it difficult for the market to see a one-sided upward trend.

Overall, it is expected that the butadiene market in China in February 2026 will mainly experience high-level fluctuations. Before the Spring Festival, the prices will generally remain high due to tight supply. After the festival, close attention should be paid to the progress of resumption of work and production in downstream sectors, plant maintenance restart dynamics, foreign market price trends, and the recovery of terminal demand.