Weak Demand, Downward Trend in Butadiene Market

April 15th, according to reports

According to the commodity market analysis system, from April 1 to April 15, 2026, the price of butadiene in China fell from 18,333.33 CNY/ton to 16,133.33 CNY/ton, a cumulative decrease of 12%. In the first half of April, the overall market trend for butadiene in China was under pressure and declining, with a generally weak trading atmosphere and a continuous drop in the market focus. The gradual weakening of cost support and the lack of strong demand from downstream sectors became the key factors driving the market trend. Even though the supply of spot goods was relatively tight, it was not enough to offset the downward pressure caused by weak demand. The industry as a whole presented a situation of strong supply and weak demand, leading to a phased price adjustment.

Cost Perspective: In the first half of April, the cost support from upstream sources for butadiene noticeably weakened. As a byproduct of ethylene production via naphtha cracking, butadiene prices are highly correlated with trends in crude oil and naphtha prices. At the beginning of the month, influenced by earlier geopolitical tensions in the Middle East, crude oil prices remained elevated, keeping naphtha costs persistently high and providing a strong cost floor for butadiene prices. However, as the situation in the Middle East eased, market expectations of tight crude oil supplies gradually cooled down, causing international crude oil prices to fluctuate downward and naphtha costs to decline accordingly. Meanwhile, with the easing of raw material shortages at Asian ethylene plants, operating rates have been gradually adjusted upward, leading to a corresponding drop in the cost of butadiene as a cracking byproduct. Additionally, the premium previously passed on to the butadiene market due to high crude oil prices has gradually dissipated, further weakening the cost-side support for higher butadiene prices and becoming a key factor driving down market prices. As of April 14, the settlement price for the May contract of U.S. WTI crude oil futures was $91.28 per barrel, while the settlement price for the June contract of Brent crude oil futures was $94.79 per barrel.

Supply Side: In the first half of April, the butadiene market in China continued to maintain a tight situation, although the pace of supply contraction has slowed somewhat. In China, some previously shut-down facilities such as Yanshan Petrochemical and Gulei Petrochemical have not yet fully resumed operations, and facilities like Yangzi Petrochemical are undergoing maintenance and operating at reduced capacity. The main production capacity in China is not running at full load, resulting in limited increases in butadiene production. In the overseas market, although facilities in major Asian producers such as South Korea and Japan are gradually restarting, the impact of previous supply contractions is still ongoing, and the volume of imported goods is lower than expected. External supplies to the Chinese market are unable to form an effective increase. In terms of inventory, butadiene inventories at East China ports remain at historically low levels, with tight spot resources available in the market. There is uneven distribution of resources in some regions, and traders have insufficient stockpiles, leading to a general reluctance to sell at low prices. Overall, the market supply remains tight.

Dongming Petrochemical's 50,000 tons/year butadiene plant is operating normally, with 224 tons sold externally at a minimum price of 15,800 CNY/ton.

Shenghong Refining's 200,000 tons/year butadiene unit is operating normally, with a price of 16,500 CNY/ton.

Yantai Wanhua's 200,000 tons/year butadiene plant is operating normally, with 168 tons sold externally. The base price is 15,600 CNY/ton, and the transaction price is 15,800-15,820 CNY/ton.

Satellite Chemical's 90,000 tons/year butadiene plant in China is operating normally, with a price increase of 300 CNY/ton, now priced at 16,300 CNY/ton.

Demand side:

The core factor behind the weakening butadiene market in the first half of April is the overall downstream demand, which has remained stable yet somewhat weak, making it difficult to sustain high prices. The key downstream sectors for butadiene are synthetic rubber and ABS resins. Among them, the synthetic rubber industry has been hit hard by the high butadiene prices, leading to a sharp rise in production costs and an expanding loss-making situation. As a result, companies have been forced to reduce their operating rates. Downstream tire manufacturers continue to maintain regular production levels, but the recovery in the end-use automotive market has been insufficient, prompting most manufacturers to focus primarily on destocking rather than actively increasing their purchases of upstream raw materials. In the ABS sector, rigid demand remains steady, yet this cannot offset the contraction in demand across the rubber industry chain. Overall, downstream companies generally adopt a cautious, wait-and-see attitude, mostly opting for small, opportunistic restocking at lower prices rather than engaging in large-scale inventory replenishment. Consequently, demand continues to weigh heavily on market conditions.

Future Market Forecast:

Taking into account the combined factors of cost, supply, and demand, it is expected that the Chinese butadiene market in the second half of April will mainly experience narrow-range fluctuations, with price swings confined to a limited range and limited room for either upward or downward movement. On the supply side, the slow recovery of short-term maintenance units and the relatively low volume of imported shipments will provide a floor of support for prices; meanwhile, the slow pace of recovery in downstream terminal demand means that procurement needs for raw materials will remain subdued, continuing to weigh on the strength of any market rebound. Going forward, it will be crucial to closely monitor trends in international crude oil prices, changes in upstream raw material costs, as well as the operational and procurement dynamics of downstream industries such as synthetic rubber and ABS. News developments and changes in spot transaction volumes will also influence market sentiment on a temporary basis. In the short term, market conditions are likely to remain within a range, shaped by the ongoing interplay between supply and demand.