Price trend
According to the Commodity Market Analysis System of SunSirs, from June 7th to June 14th, the domestic butadiene market price increased from 12,362.5 RMB/ton to 13,475 RMB/ton, with a 9% increase in price during the cycle. This week, the domestic butadiene market continued to maintain a stronger performance, with a weekly increase of 9%. The supply side remained tight, with limited available spot resources in the market and inventory falling to relatively low levels. Some holders were hesitant to sell, and downstream price increases had once again boosted market sentiment. In the short term, the market expectations will remain stronger.
Analysis review
Cost side: During the cycle, the crude oil market was stronger, the US dollar continued its strong position, and international crude oil futures saw a significant jump on Monday, with WTI up 2.9% and Brent up 2.5%. SunSirs’ crude oil analysts believe that in the short to medium term, the crude oil market is intertwined with long and short factors, and the macro level will be suppressed by the strong US dollar and high interest rates from the Federal Reserve. The main factors supporting oil prices in the future will be the peak summer demand season, with Asian summer demand and North American driving season coming into play. It is expected that oil prices will maintain fluctuations at a high level.
Supply side: The listed price of butadiene by various sales companies of Sinopec had been raised multiple times to 13,800 RMB/ton, with a continuous increase of 1,300 RMB/ton within the week. Fujian United and Zhejiang Petrochemical Unit 2 had not been restarted, and Dushanzi Petrochemical was shut down for maintenance. The combination of favorable factors in the supply of butadiene led to strong market expectations in the future.
Demand side: Downstream synthetic rubber prices continued to rise, while the spot price of butadiene rubber continued to rise due to the surge in futures, high costs, and tight supply. As of June 17th, demand was still acceptable, but market prices were strengthening due to cost and supply side support. With the continuous strengthening of raw material prices, downstream enterprises were temporarily under pressure on profits, recent purchases had been cautious, and the favorable factors still existed overall.
As of the closing price on June 14th (Friday), the external price of Asian butadiene had increased: FOB South Korea was quoted at 1,445-1,455 US dollars/ton, up 50 US dollars/ton; China CFR was quoted at 1,495-1,505 US dollars/ton, up 50 US dollars/ton; European butadiene FOB Rotterdam closed at 1,160-1,170 US dollars/ton, up 30 US dollars/ton; FD Northwest Europe remained stable at 1,065-1,075 euros/ton.
Market outlook
In the short term, the available spot resources in the market remain tight, and the continuous increase in supplier prices had boosted the atmosphere of the spot market. Under the influence of bullish market expectations in the short term, holders had a strong reluctance to sell, making it difficult to find low-priced goods in the market. SunSirs’ butadiene analysts predict that the domestic butadiene market will continue to maintain a stronger trend in the short term, with a focus on downstream procurement in the future.
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