June 26 News
The Chinese butadiene market has shown a weakening trend, with the spot price continuously declining throughout the week. The market's trading focus has been consistently lowering, and the overall trading atmosphere is cold. During the week, the mainstream quotation for butadiene in East China continued to fall, showing a clear decrease in overall prices. The futures market also weakened in line with the spot market, with the main contract dropping significantly early in the week, putting pressure on the entire synthetic rubber sector, and the market's pessimistic trading sentiment continued to rise. According to the commodity market analysis system data, from June 19 to June 26, 2026, the price of butadiene in China fell from 9,806.67 CNY/ton to 8,900 CNY/ton, a cumulative decline of 9.25%, indicating that the market is in a weak downward trend.
Cost Perspective: This week, the cost support for butadiene has completely faded, shifting from a previous cost-driven support to a drag on market performance. Upstream raw material prices have generally weakened across the board. Geopolitical tensions in the Middle East have gradually eased, causing international crude oil prices to continue their downward trend. China’s crude oil futures have followed suit, and as a result of this correlation with crude oil prices, naphtha market prices have also declined accordingly, further squeezing cracking margins in the refining and petrochemical industry. China’s spot ethylene price has likewise softened and fallen in line with trends in crude oil and naphtha. The overall decline in raw material prices has completely eliminated the cost support for butadiene, significantly easing cost pressures on producing companies. As a result, market willingness to maintain prices has weakened, and spot quotes have continued to fall in sync with raw material price movements. As of June 25, the settlement price for U.S. WTI crude oil futures was $71.92 per barrel, while the settlement price for Brent crude oil September contracts was $75.50 per barrel.
Supply Side: This week, China's butadiene supply showed a loose pattern with ongoing plant maintenance, stable market availability, and continuously increasing inventory. The overall spot market had ample circulating resources. Many major butadiene production facilities in China remained shut down for maintenance, keeping the industry's overall operating rate at a low level. However, some normally operating plants moderately increased their production load, effectively offsetting the reduction in supply due to maintenance, maintaining a stable supply of market goods. At the same time, the downstream market's consumption speed was slow, with port inventory in the East China region continuously accumulating. The steady replenishment of domestic trade goods and the slowing pace of downstream pick-ups further exacerbated the loose spot market situation. Currently, the main producers in the market still primarily use long-term supply contracts, but there has been an increase in the available external sales. The inventory of intermediaries has steadily risen, and the overall pressure to sell off stock in the industry has continued to increase. Some merchants have proactively offered discounts to boost transactions and accelerate inventory reduction.
Dongming Petrochemical's 50,000 tons/year butadiene plant is operating normally, with 280 tons for external sales, at a minimum price of 8,800 CNY/ton.
Satellite Chemical's 90,000 tons/year butadiene plant is operating normally, with 336 tons available for external sales, starting at 8,800 CNY per ton.
| Company | Price (CNY/ton) | Capacity | Plant Status |
|---|---|---|---|
| Dongming Petrochemical | 280 tons for external sales, floor price 8,800 CNY/ton | 50,000 tons | Normal operation, stable supply for external sales |
| Satellite Chemical | 336 tons for external sales, starting bid 8,800 CNY/ton | 90,000 tons | Normal operation, stable supply for external sales |
Demand Side:
This week, the downstream demand for butadiene has been generally weak, with multiple core industries experiencing widespread losses. The enthusiasm for production and raw material procurement among enterprises is low, continuously suppressing the overall market performance of butadiene. Currently, the tire industry has entered the traditional off-season, with a reduction in terminal market order volumes and severe accumulation of finished goods inventory. Overall, Chinese tire manufacturers are operating at a lower capacity, while styrene-butadiene rubber (SBR) producers are under profit pressure, actively reducing production and lowering loads. They are only maintaining a low level of rigid demand procurement for butadiene raw materials, with a strong desire to purchase at lower prices. The loss situation in the SBS and ABS industries is even more pronounced, with a significant decline in production loads and a noticeable shrinkage in rigid demand. Downstream enterprises generally hold a wait-and-see attitude, expecting further price drops, and their willingness to procure raw materials is extremely low. Only a small amount of rigid procurement demand exists in the styrene-butadiene latex segment, with scattered transactions in the market and no concentrated restocking. The demand side is completely unable to support or drive up the price of butadiene. As of June 25, the SBR market in the East China region remains weak. International crude oil prices are slightly fluctuating, with downstream inquiries based on demand. Spot traders of SBR are making minor adjustments to their offers. Currently, Daqing and Yangzi SBR are priced at 13,300 to 13,550 CNY/ton; some private brands are quoted around 13,100 to 13,300 CNY/ton.
Future Market Forecast:
From a comprehensive fundamental perspective, the market currently continues to lack cost support. Spot inventories keep accumulating, and supply remains relatively ample. Meanwhile, downstream industries are in the traditional off-season, resulting in weak overall demand and a strong wait-and-see attitude among buyers. Multiple negative factors are dominating the market situation, with only some plant maintenance activities providing slight support—support that is insufficient to offset the overall downward pressure. As a result, it is expected that the Chinese butadiene market will continue its weak and volatile trend in early July, with room for a modest further decline. Going forward, market developments will require close attention to crude oil trends, the pace of restocking by downstream users, the status of ongoing plant maintenance, and changes in port inventories.
