SunSirs: Due to Tight Supply, the Butadiene Market Was on the Rise
January 07 2025 14:24:24 SunSirs (John)
Price trend
According to the Commodity Market Analysis System of SunSirs, from December 30th to January 6th, the domestic butadiene market price increased from 10,800 RMB/ton to 11,762 RMB/ton, with a price increase of 8.91% during the cycle. This week, the butadiene market continued to rise, and the available supply of goods in the spot market was generally tight. Holders of goods had a strong willingness to raise prices, and the spot market quotation was overall upward. Boosted by this news, spot market offers generally rose. But as prices continued to rise, downstream high-level receiving capacity gradually declined. As the Spring Festival approaching, some pre holiday purchasing demand has been released downstream, driving an improvement in the atmosphere of the spot market. Sinopec has raised prices twice in a row this week, temporarily at 12,000 RMB/ton. As of January 6th, the delivery price to Shandong region was 12,100 RMB/ton.
Analysis review
On the cost side: During this cycle, crude oil prices have slightly increased. On the one hand, the OPEC+ production reduction agreement has been extended until the end of the first quarter, and some oil producing countries were still implementing compensatory production cuts. This has provided favorable support for crude oil supply, leading to an increase in crude oil market prices. On the other hand, the instability of the situation in the Middle East still existed, which was good news for the international oil market. Overall, the rate of change in crude oil during the cycle remained positive. As of January 3rd, international crude oil futures rose and the settlement price of the main contract of WTI crude oil futures in the United States was 73.96 US dollars per barrel. The settlement price of the main Brent crude oil futures contract was 76.51 US dollars per barrel.
Supply side: The listed price of butadiene for various sales companies of Sinopec has been lowered multiple times this month, with a price of 10,900 RMB/ton as of the 23rd, an increase of 400 RMB/ton compared to the same period last week's 10,500 RMB/ton. The 120,000 tons/year butadiene plant of North Huajin has been restarted in October; Fujian United's 180,000 tons/year butadiene plant was shut down for maintenance on October 10th; Jilin Petrochemical's 190,000 ton plant was shut down on August 25th and restarted on October 16th. Recently, the comprehensive operating rate of the domestic butadiene industry has not changed much, and the overall supply was relatively stable.
Shenghong Refining's 200,000 tons/year butadiene extraction unit was operating normally, with an increase of 600 RMB/ton and an implementation of 12,000 RMB/ton.
The 120,000 tons/year butadiene plant of North Huajin was operating normally, with 168 tons exported. The bidding price was 11,210 RMB/ton, and the transaction price was 11,540 RMB/ton.
The 90,000 tons/year butadiene plant of Satellite Chemical was operating normally, with an increase of 700 RMB/ton and an implementation of 12,000 RMB/ton.
Demand side: According to the commodity market analysis system of SunSirs, as of December 31, the price of styrene butadiene rubber in the East China market was 14,900 RMB/ton, which was basically the same as the same period last week. As of January 6th, the domestic styrene butadiene rubber plant construction was basically stable, and as of the end of the month, the domestic styrene butadiene rubber construction was around 70%. As of January 6th, the mainstream market price for butadiene styrene rubber in Fushun, Jihua, Yangzi, and Qilu in East China was around 14,750-15,050 RMB/ton.
Market outlook
From a supply perspective, the butadiene market has been experiencing tight supply recently, with demand approaching the Spring Festival and downstream intentions to replenish inventory. The market demand has shown good performance. Overall, the performance of the butadiene market is stronger, and it is expected that there will still be some upward space in the future.
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