Price trend

According to the monitoring of SunSirs, the domestic butadiene market rose by a narrow margin. From January 3 to 5, the domestic butadiene market price rose from 7,241 RMB/ton to 7,416 RMB/ton, with a price increase of 2.42%, 16.49% month on month and 77.42% year on year. This week, the supply was relatively stable, and some downstream replenishment needs followed up before the festival, which boosted the spot market. During the week, the external market rose slightly, the prices of domestic mainstream suppliers increased actively, and after the festival, some Shandong auction goods were sold at a large price increase, which boosted the market to a wide jump on Wednesday. In terms of market, the delivery price in Shandong Luzhong area was 8,100-8,200 RMB/ton, and the self delivery price in East China was 7,500-7,800 RMB/ton.

Analysis review

On the cost side, international crude oil declined by a narrow margin. On January 5, the benchmark price of WTI crude oil of SunSirs was 76.93 US dollars/barrel, a decrease of -1.87% compared with the price on January 1 (78.40 US dollars/barrel). In the short term, the supply pressure is heavy, the demand side is also weak, and the oil market may maintain a weak trend in the near future. In the medium and long term, the demand side faces negative macroeconomic feedback suppression. However, with the increase of OPEC+ production restriction policy or adjustment efforts, the impact of the decline in Russian oil exports will play a role. Supply and demand will seek to rebalance, and oil prices still have the opportunity to rebound. The price of naphtha rose significantly. On January 5, the benchmark price of naphtha in SunSirs was 7,411.50 RMB/ton, up 8.33% compared with that of January 1 (6,841.50 RMB/ton). The cost of butadiene is intertwined with positive and negative factors.

On the supply side, the listed price of butadiene of Sinopec sales companies had been increased by 500 RMB/ton accumulatively, and 7,800 RMB/ton had been implemented as of January 5. The 140,000 t/a butadiene plant of Dalian Hengli was operating stably, the source of goods was exported normally, and the listing price was increased by 200 RMB/ton to 7,310 RMB/ton. The 64,000 t/a butadiene extraction unit of Shenhua Ningxia Coal was in normal operation, and a small amount of goods were exported. The price was increased by 800 RMB/ton to 7,700 RMB/ton. Although some early maintenance devices were restarted, the operating rate was still relatively low, and there were some positive factors in the supply side.

On the demand side, SunSirs monitored that the domestic BR market was running smoothly. On January 5, the benchmark price of BR in SunSirs was 10,580.00 RMB/ton, unchanged from January 1. The price of SBR in China rose slightly. On January 5, the benchmark price of SBR in SunSirs was 10,833.33 RMB/ton, up 0.15% compared with January 1 (10,816.67 RMB/ton). The price of acrylonitrile-butadiene rubber in China rose by a narrow margin. On January 5, the benchmark price of acrylonitrile-butadiene rubber in SunSirs was 15,150.00 RMB/ton, up 0.33% compared with January 1 (15,100.00 RMB/ton). At present, the downstream rubber industry continues to be in rigid demand, lacking sustainable support. Most of the product prices fall in a narrow range, and the operating rate remains around 60%. Demand side of butadiene is mixed.

In terms of external market: closing price on December 22, the price of Asian butadiene external market rose: South Korea FOB quoted 820-830 US dollars/ton, up 15 US dollars/ton; China CFR reported 850-860 US dollars/ton, up 15 US dollars/ton. The external price of butadiene in Europe remained stable: FOB Rotterdam closed at 505-515 US dollars/ton; FD Northwest Europe closed at 695-705 euros/ton.

Market outlook

The high price boosted the enthusiasm of merchants for shipment, and the downstream profits were under pressure, continuing the rigid demand. In the short term, domestic supplier prices still show high support. With the approaching of the Spring Festival holiday, some small and medium-sized downstream enterprises have no lack of holiday plans, and the demand side lacks continuity. Butadiene analysts from SunSirs predict that the domestic butadiene market may consolidate in the short term.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com