August 28 news
According to the commodity market analysis system, in August 2026, the butadiene market in China saw a significant increase, with prices continuously rising in the first half of the month, slightly retreating from the high levels in the second half, and ending the month with a substantial gain. The market price rose from 10,016.67 CNY/ton at the beginning of the month to 12,166.67 CNY/ton by the end of the month, resulting in a cumulative price increase of 21.46% during the period.
The core driver of the August market was the tight spot supply resulting from concentrated maintenance at supply-side facilities, coupled with strong support from rising costs of crude oil and naphtha feedstock. As a result, sellers became increasingly reluctant to sell, driving prices to rise rapidly. However, once prices reached high levels, downstream deep-processing enterprises faced mounting profit pressures and began to strongly resist higher prices. Consequently, rigid demand for procurement continued to tighten. At month-end, as some facilities resumed production and supply eased slightly, prices experienced a moderate pullback. Overall, the market exhibited typical structural upward trends characterized by "strong supply and weak demand," and the tug-of-war between bulls and bears gradually intensified.
Cost Perspective: In August, international crude oil prices remained relatively strong, supported by geopolitical tensions and fundamental supply-and-demand dynamics. Consequently, upstream naphtha prices also rose in tandem, continuously pushing up the production costs of butadiene via cracking processes, thereby providing solid bottom support for China’s butadiene market. Meanwhile, overseas butadiene quotations in U.S. dollars have been steadily increasing, significantly boosting import costs. As a result, the arbitrage window between domestic and overseas markets has closed, and the pace of replenishment from foreign sources has slowed down. Although this month’s price increase for butadiene far exceeded that of downstream rubber and plastic products, profit shifts within the industrial chain have favored the upstream sector, leaving downstream processing profits under persistent pressure. Nevertheless, upstream raw material prices remained stubbornly high without any significant decline, ensuring that cost-related positive factors persisted throughout the month and effectively limiting the downside potential of the butadiene market—thus serving as a crucial underlying support for this round of price increases. As of August 27, the settlement price for the October contract of U.S. WTI crude oil futures stood at $83.53 per barrel, while the settlement price for the November contract of Brent crude oil futures reached $88.52 per barrel.
Supply side:
In August, the overall tight supply in China's butadiene market was the core factor driving the significant price increase. Multiple major cracking butadiene units in China entered a concentrated maintenance period, with key facilities such as Yanshan, Yangzi, Silianbang, and Hainan Refining undergoing temporary shutdowns. This led to a substantial decline in the overall operating rate, significantly reducing the available spot commodity circulation. In terms of imports, due to high foreign prices, traders showed low willingness to import, resulting in a limited amount of arrivals for the month. Port inventory continued to decrease and remained at a low level. Additionally, some Chinese butadiene was exported, further reducing the available spot supply in China. Traders, with low inventories, were reluctant to sell and maintained high prices. By the end of the month, some of the previously shut-down units gradually restarted production, slightly increasing the supply. This alleviated the tight supply situation, and the increased availability of high-priced goods led to a small price correction, temporarily reversing the one-sided upward trend.
As of August 28, the listed price for butadiene at Sinopec’s sales companies is 12,500 CNY per ton, an increase of 2,500 CNY per ton compared to the price on July 30.
Dongming Petrochemical's 50,000 tons/year butadiene plant is operating normally, with 196 tons sold externally at a minimum price of 12,500 CNY per ton.
Satellite Chemical's 90,000 tons/year butadiene plant is operating normally, with 336 tons for external sales, starting at 12,500 CNY/ton.
| Company | Price (CNY/ton) | Capacity | Plant Status |
|---|---|---|---|
| Dongming Petrochemical | 196 tons for external sales, floor price 12,500 CNY/ton | 50,000 tons | Normal operation, stable supply for external sales |
| Satellite Chemical | 336 tons for external sales, starting bid 12,500 CNY/ton | 90,000 tons | Normal operation, stable supply for external sales |
Demand side:
This month, the downstream demand for butadiene showed a clear structural differentiation, with overall rigid demand support being limited and high prices being difficult to sustain. The rubber market exhibited significant characteristics of a low season, imposing a rigid constraint on the demand for raw materials. In the rubber sector, the Chinese natural rubber and synthetic rubber markets operated in a volatile manner in August. Natural rubber was slightly strengthened by the support of rainfall disturbances in the production areas and limited raw material supply, but the terminal transmission was weak. Butyl rubber and styrene-butadiene rubber, relying on the advantage of low-cost raw material substitution, maintained medium to high levels of industry operation, providing stable rigid demand support for butadiene. However, the tire terminal was in the traditional off-season for consumption, with the operating rates of all-steel and semi-steel tires in China fluctuating slightly and generally remaining low. The finished product inventory at the terminal continued to be high, and orders from downstream automakers and auto parts processing plants were weak. The industry as a whole mainly focused on production based on rigid demand, without any concentrated increase in production. At the same time, the significant price increase of butadiene within the month continuously compressed the processing profits of rubber enterprises, putting pressure on the profitability of synthetic rubber manufacturers. There was a strong resistance to high-priced raw materials, and most companies adhered to a just-in-time replenishment model to avoid the risk of raw material price fluctuations. Apart from rubber categories, long-term losses in chemical deep-processing categories such as ABS and SBS further squeezed the processing profits of enterprises, leading to widespread reductions in production and a continuous shrinkage in the demand for raw material procurement. After the butadiene price surged during the month, the entire downstream industry quickly became more cautious, with market transactions significantly cooling down. This became the main bearish factor constraining the sustained upward trend of the market and driving the price to retreat at the end of the month.
Future Market Forecast:
Considering the overall supply-demand dynamics and cost fundamentals, China’s butadiene market in September will likely maintain a high-level, wide-range volatile pattern. On the positive side, upstream crude oil and naphtha cost support remains solid, and as the traditional “Golden September” peak consumption season kicks off, tire terminal demand is expected to gradually recover. There are also expectations of a rebound in rubber product production, which could lead to marginal improvements in rigid demand procurement. On the negative side, however, a number of units undergoing maintenance will continue to resume operations, gradually increasing market supply. Coupled with weak profit margins in downstream deep-processing industries, enterprises lack the capacity to absorb high-priced raw materials and are cautious about purchasing, making it difficult for demand to surge significantly. Overall, while butadiene prices are supported by costs and previously low inventory levels, the risk of a sharp decline is limited. Nevertheless, upward potential will be constrained by both increased supply and weak demand, making it unlikely for the market to see another sustained, one-sided rally. Going forward, key factors to watch include the progress of resumed plant operations, fluctuations in crude oil prices, changes in downstream production activity, and developments in rigid demand procurement.
