Deep decline in butadiene market

According to the commodity market analysis system of the business community, from May 29 to June 2, the domestic butadiene market price fell from 7140 yuan/ton to 6612 yuan/ton, a 7.39% decline in the cycle, 25.30% month on month, 41.73% year-on-year. Part of the maintenance equipment has been restored, and production has increased. At the same time, imported cargo has gradually arrived at the port, putting pressure on the supply side of the market. Some downstream industries have reduced their burden, and the demand side has significantly dragged down the inventory pressure of butadiene suppliers. With the continuous decline of Sinopec prices, the domestic butadiene market has rapidly declined.


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Cost and crude oil: the market is worried about whether the US Congress will pass the US debt ceiling agreement, overlapping the internal differences of oil producing countries OEPC+, and the oil market is under pressure. On June 2nd, the benchmark price of Brent crude oil for Business Society was 72.60 US dollars per barrel, while the benchmark price of WTI crude oil was 68.09 US dollars per barrel. In terms of naphtha, the cost and demand are weak, with terminal restructuring and weak demand for ethylene. Market trading is limited, and transactions are light. The naphtha market is weak and organized. On June 2, the benchmark price for naphtha in Shangshang Society was 7589.00 yuan/ton. The cost side of butadiene is bearish.


On the supply side, the main production enterprise Sinopec East China Sales Company has reduced the price of butadiene by 1100 yuan/ton, with the latest listed price at 6400 yuan/ton. The restart of Liaoyang Petrochemical and Shenhua Ningxia coal plants, coupled with the continuous arrival of imported cargo at ports, has put pressure on the market supply side. Short term bearish impact on butadiene supply side.


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On the demand side, dragged by cost and demand side bearish factors, the downstream synthetic rubber market is weak and declining, and downstream procurement enthusiasm is not high, with on-demand procurement being the main focus. The synchronous downtrend of upstream and downstream products affects the industrial chain profits, making it difficult to effectively move down, and it is difficult to find demand support in the butadiene market. The demand for butadiene is weak.


On June 1st, the closing price of butadiene in Asia was lowered: FOB South Korea was quoted at $725-735 per ton, a decrease of $40 per ton; China CFR reported a decrease of $40 per ton from $775 to $785 per ton. The external price of butadiene in Europe remained stable: FOB Rotterdam closed at $545-555 per ton; FD Northwest Europe closed at 675-685 euros per ton.


In the future market forecast, due to the impact of terminal demand, some downstream industries will experience a decrease in burden, while domestic production and cargo supply are abundant. Butadiene analysts from Business Society predict that the domestic butadiene market will continue to decline weakly.

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