Chinese Butanone Market Still Saw Tight Supply

At the end of August, because of a fire and power outage at Europe’s largest refinery, Pernis , the 90kt/a butanone unit was shut passively. This intensified the tight supply of butanone in the European market. In August, the European butanone price increased greatly. Moreover, butanone from Asia was hard to export Europe timely, the butanone prices was muddled. The butanone price in automotive market was €2,500/mt. It was heard that few price was almost €3,000/mt, which hit a record high price.

Considering the high prices in the European market, Janpan and China chose to export Butanone to the European market. With the tight supply in Europe, Chinese butanone export market was booming. Zibo Qixiang Tengda Chemical exported large amounts of butanone. Furthermore, units in Ningbo Haiyue New Material and Hebei Zhongjie Petrochemical Group were shut. The output and sale situation in Shandong Dongming Petrochemical were limited, influenced by the environment protection supervision.

To sum up, the supply of Chinese butanone was tight in the spot market. The butanone price continued increasing. Up to August 31, the butanone prices in South China were in the range of RMB 9,100-9,200/mt, while the prices in East China were over RMB 9,000/mt. In the short term, the supply of butanone will be still thin. Although the players will be bullish about the Butanone market, they will be still reluctant to sell at low prices.

According the data from Administration of Customs, in July, the Chinese butanone total export volume was 17.16972kt, while the cumulative export was 54.48774kt. The average price of butanone in July was $916.31/mt. The export was up 564.06% M-O-M, while it was up 31.34% Y-O-Y. From this data, the butanone market in July was unaffected by the Europe market, and the export was almost 20kt. Affected by the Europe market in August, it is predicted that Chinese butanone export volume will be 350kt, which will account for 50% of the total Chinese butanone output.

In the future, the low workload in Shandong Dongming Petrochemical will not change until mid-September influenced by the environment protection supervision. The units in Ningbo Haiyue New Material will postpone to restart in October. Furthermore, a 30kt/a production line will postpone to undergo maintenance in October. A 40kt/a unit in PetroChina Harbin will take overhaul in September and will last for a month. Units in Sinopec Taizhou Company still underwent maintenance and lasted until the end of this year. From this point of view, it is predicted that the supply will be still tight in the spot market in September.

When entering the traditional boom season in September, the downstream market will turn better. However, as the butanone price hit the highest price for three years, the players will be cautious about the market. To sum up, it is predicted that the Chinese butanone market price in September will increase to RMB 9,000/mt. The butanone market will increase slightly and then maintain a high level.