SunSirs: Butadiene Market Was on the Rise

Price trend

According to the Commodity Market Analysis System of SunSirs, from August 28th to September 4th, the domestic butadiene market price increased from 7,618 RMB/ton to 8,063 RMB/ton, with a price increase of 5.84% during the cycle. The price increased by 9.32% month on month and decreased by 8.48% year-on-year. The downstream synthetic rubber market strengthened, and the demand side was boosted. At the same time, during the week, the strong rise in external market prices had significantly boosted the mentality of merchants in offering.

Analysis review

On the cost side, in terms of crude oil: International crude oil futures had significantly increased, and OPEC+, the oil producing countries, was rumored to have extended production cuts. The market expected an additional 1 million barrels of production reduction from Saudi Arabia would continue until October, and supply tightening was expected to continue to ferment and boost the oil market. As of the close on September 1st, the settlement price of the Brent crude oil futures main contract was at 88.55 US dollars per barrel, an increase of 1.72 US dollars or 2.0%.

In terms of naphtha, the domestic naphtha market had experienced high volatility. The high level of the crude oil market had a clear guiding effect on the naphtha market. As September 4, there was sufficient supply in the local refining naphtha market, and a small amount of ethylene cracking in the terminal direction was in demand. Refineries were actively shipping butadiene, which was influenced by favorable factors in terms of cost.

On the supply side, the main production enterprises, Sinopec, and various sales companies had maintained a price increase of 500 RMB/ton to 8,100 RMB/ton for butadiene. Shandong Weite Plant continued to be shut down, while Zhejiang Petrochemical 3# Plant was shut down for maintenance. The short-term supply side of butadiene had a bullish influence.

On the demand side, supported by favorable raw materials, and driven by an increase in the operating rate of the tire industry, the downstream synthetic rubber product market continued to rise. As of September 4th, except for some closed orders and not reporting, the overall offer of domestic butadiene and styrene merchants in SunSirs had increased to 13,400~13,600 RMB/ton, a significant increase compared to the beginning of the month; The benchmark price of butadiene rubber was 11,970.00 RMB/ton. The demand for butadiene had a bullish influence.

On September 1st, the closing price of the Asian butadiene outer market was closed due to a public holiday in Singapore. The external price of butadiene in Europe remained stable: FOB Rotterdam closed at 545-555 US dollars per ton; FD Northwest Europe closed at 620-630 euros per ton.

Market outlook

Recently, the prices of the external market and the downstream rubber market had risen, which boosted the attitude of some merchants towards offering; On the other hand, there was ample supply and relatively high inventory, resulting in insufficient follow-up of downstream inquiries. Butadiene analysts from SunSirs predict that the domestic butadiene market is entering a stage of fluctuating and consolidating.

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