For the Quarter Ending March 2024
North- America
Butadiene prices have been on a firm footing in the US market throughout the first quarter of 2024. This improvement is attributed to limited supplies within the domestic market. Supply concerns became prominent in the domestic market from mid-January onwards due to a force majeure declaration, plant shutdown, and reduced domestic operating rates. These factors, coupled with the impact of deep-freezing temperatures on Butadiene production, led to a supply shortage domestically.
Consequently, manufacturers in the Butadiene market adopted bullish sentiments. Simultaneously, imports from the European market were affected as Royal Dutch Shell, a prominent Anglo-Dutch oil and gas company, declared force majeure in early February regarding Butadiene supply to its facility in Norco, Louisiana, USA. Moreover, on the demand front inquiries from the downstream Synthetic rubber particularly from the SBR industry have improved as consumption from the automotive sector has increased in the domestic market which further pushed up the prices of Butadiene.
According to the National Automobile Dealer Association, Total Vehicle Sales in the United States increased to 15.81 million in February from 14.92 Million in January of 2024, boosting the demand dynamics of upstream raw materials, including Butadiene. However, the market players are optimistic that the demand from the downstream construction sector will escalate towards the end of the first quarter of 2024. Therefore, prices of Butadiene CFR USGC were settled at USD 831/MT during March 2024.
Asia- Pacific
Throughout the first quarter of 2024, Butadiene has persistently increased in the Singaporean market supported by soaring energy and feedstock prices coupled with tight supply in the domestic market. The market player reported that the feedstock Naphtha prices increased throughout the past month which in turn resulted in the high production cost of Butadiene in the domestic market. In addition, global crude oil prices were extending gains, with Brent crude hitting past the USD 91/barrel mark, fuelled by escalating geopolitical tension in the Middle East which could disrupt supply amid output cuts by OPEC and its allies. The strong crude oil prices have further positively impacted the overall production cost of Butadiene, leading to bullish market sentiments about Butadiene among the manufacturers. On the other hand, demand for Butadiene from the downstream Synthetic rubber and Polymer industry has remained stable throughout the quarter. Most market transactions were mainly based on a need-on-demand basis. In addition, purchasing activity from the overseas market has declined amid unfavourable economic conditions. As per the market sources, overall exports of chemicals and chemical products in March fell by 37% year on year to S$3.54 billion, reversing the 5.8% expansion in February. In addition, the operating rates have been steady as demand from the downstream industry has not fully improved in the domestic market. The material availability was observed on the lower end within the domestic market which further boosted the market sentiments of Butadiene. As a result, prices of Butadiene FOB Jurong were settled at USD 1265/MT during March 2024.
Europe
Butadiene prices witnessed hefty price increases across the German market throughout the first quarter of 2024. The cost side was one of the major drivers of the uptrend as feedstock Naphtha prices have continued to rise, leading to the bullish market sentiments of Butadiene among the manufacturers. On the upstream front, global crude oil prices have remained above $ 80 per barrel, indicating a tightening in the physical market amid ongoing OPEC+ production cuts and the prolonged rerouting of cargoes away from the Red Sea and Suez Canal. The high crude oil prices have further pressured the feedstock Naphtha prices to remain firm within the domestic market. Despite this, OPEC+ is not planning any policy changes in the upcoming joint Ministerial Monitoring Committee meeting. Meanwhile, geopolitical tensions in the Middle East and Russia are raising concerns about tighter supply. Players are closely monitoring these developments, alongside global economic struggles against recession and the Federal Reserve's potential rate cuts this summer. In terms of domestic production, for the past few quarters, manufacturing firms have been operating at reduced rates in the backdrop of challenging economic conditions across the domestic market. As a result of low operating rates, manufacturing firms have faced increased supply-side pressures due to the limited availability of Butadiene. Thus, foreseeing the limited supply and high production cost, promoted the Butadiene manufacturers to raise their offers, to gain some profit margins. On the other side, the demand from the downstream Synthetic rubber and Polymer industry was moderate throughout the quarter. Furthermore, buyers remained side-lined in anticipation of lower prices next quarter. Therefore, prices of Butadiene FD Hamburg were settled at USD 1026/MT during March 2024.
For the Quarter Ending December 2023
North- America-
Butadiene prices have drastically increased in the US market during the fourth quarter of 2023. The cost support from feedstock Butane was sufficient for Butadiene as its prices settled on the higher side in the domestic market. These led to the bullish market sentiments of Butadiene among the end-users. On the input energy front, the Natural prices have been observed on the higher end in the domestic market ahead of high demand. The Henry Hub spot prices increased 1 cent from $ 2.76 per million British thermal units (MMBtu) which proportionally impacted the production cost of Butadiene in the domestic market.
However, demand from the downstream Synthetic rubber (NBR, SBR) and polymer (ABS) has remained subdued as offtake from the end-user automotive and construction sector has been sluggish amid null season demand but it was insufficient to drive the price realizations of Butadiene at the lower end in the domestic market. The construction sector has slowed down as the housing market is rolling over from the weight of the Fed’s rate hikes along with high mortgage rates. Housing starts plunged 11.3% in August to a 1.28m rate down 14.8% from a year ago. In addition, the strike by the United Auto Workers (UAW) against the Big Three US automakers GM, Ford, and Stellantis that started on 15 September threatens to upend the sole bright spot for chemicals demand. While strike action at the Big Three is thus far limited to select plants, it is poised to further broaden if negotiations stall
Furthermore, the manufacturing firms were operating at low rates as demand from the downstream industry had not improved yet. Due to low production activities, the material availability was limited to cater to overall downstream demand which supported the prices to follow an upward trend in the domestic market. Moreover, the supply chain has been disrupted by the prolonged drought in the Panama Canal and the unrest in the Red Sea which in turn led to supply shortage in the domestic market. Overall, the continuous support from feedstock Butane was keeping the prices of Butadiene at elevated levels. Thus, prices of Butadiene CFR USGC were settled at USD 696/MT during December 2023.
Asia- Pacific-
Butadiene prices have witnessed mixed sentiments across the Asian market throughout the fourth quarter of 2023. During the initial and mid of Q4, Butadiene prices increased in the South Korean market as the inventory levels dropped in the South Korean market. This decline in inventories has culminated slight improvement in the prices as the market participants looked to seize upon the opportunity to negotiate better prices amidst limited availability. Meanwhile, the demand from the synthetic rubber and polymer industry has been declining but it was insufficient to drive the price realizations of Butadiene in the domestic market. Although, feedstock Naphtha prices have decreased it had a minimal impact on the prices of Butadiene in the domestic market.
However, towards the end of the quarter, Butadiene prices have inched lower in the domestic market. The feedstock Naphtha prices have decreased followed by weak upstream crude oil prices which in turn led to the low production cost of Butadiene in the domestic market. These led to the bearish market sentiments of Butadiene among the manufacturers.
In addition, demand for Butadiene from the synthetic rubber and polymer industry has remained tepid due to sluggish consumption from the end-user automotive and construction industry which weighed down the prices of Butadiene in the domestic market. Meanwhile, imports have turned cheaper which further led to low imported prices of Butadiene. Furthermore, the material availability was observed on the higher end which promoted the traders to clear out their inventories at low prices in the domestic market. Thus, as a result, prices of Butadiene CFR Busan were settled at USD 904/MT during December 2023.
Europe-
Butadiene prices have strengthened in the German market during the fourth quarter of 2023 supported by reduced supply within the domestic market. Although, feedstock Naphtha prices have decreased throughout the quarter, it had limited bearing over the prices of Butadiene in the domestic market. Additionally, the crude C4 market including Butadiene was tight amid ongoing planned and unplanned outages at European steam crackers. Moreover, Repsol's Tarragona cracker in Spain was the latest plant to go offline following a fire on Nov. 23, while Total Energies' Antwerp NC3 cracker and subsequent Butadiene production remained offline for planned maintenance which was due to end in early December, resulted in the supply shortage in the domestic market.
Meanwhile, imports from the Asian market have also become more expensive due to rising freight charges, which have further exerted upward pressure on Butadiene prices. Market sources indicate that the Shanghai Containerized Freight Index (SCFI) shows Asia-North Europe freight rates increasing by 9% to USD 925/TEU, while Asia-Mediterranean rates rose by 10% to USD 1,387 on December 8th. This marks the second consecutive week of growth for these rates. Furthermore, market participants anticipate that gains in Asia-Europe freight rates are likely to continue throughout January 2024.
However, market players reported overall consumption of Butadiene remained soft, weighed down by weak synthetic rubber (NBR, PBR, and SBR) and polymer (ABS) demand from the automotive and construction industry in the domestic market. This has been insufficient to drive Butadiene prices upward at the lower end of the domestic market. Therefore, prices of Butadiene FD Hamburg were settled at USD 772/MT during December 2023.
For the Quarter Ending September 2023
North America
Butadiene prices have witnessed a fluctuating trend in the US market during the third quarter of 2023. During July and August, Butadiene prices have inched lower in the domestic market. The pace of inquiries originating from Synthetic rubber (NBR, PBR, SBR) and Polymer (ABS) has remained subdued amidst firm inflationary pressure and high interest rates by the central bank, which deteriorated the purchasing power of end-users. Furthermore, the manufacturing purchasing manager's index remained in the contraction zone during July 2023 (i.e., below 50 points), reflecting a decline in new orders. On the other side, BASF total in Port Arthur, Texas, has a production capacity of 410,000 MT/Year and has shut down its Butadiene plant amidst maintenance turnarounds. However, during September 2023 Butadiene prices have gained an uptrend in the domestic market owing to tight supply of Butadiene. The feedstock Butane prices have increased amid strong Natural gas prices, resulting in the high production cost of Butadiene. Despite the better performance of the automotive sector, demand for Butadiene from the downstream Synthetic rubber as well as from the Polymer industry has remained weak, but it was insufficient to drive the prices of Butadiene to the lower side. Furthermore, the supply chain has been impacted by the prolonged drought in the Panama Canal and Hurricane Hilary, leading to a supply shortage in the domestic market, which promoted traders or manufacturers to revise positive quotations. As a result, prices of Butadiene CFR USGC were settled at USD 565/MT during September 2023.
Asia-Pacific
Butadiene prices have showcased mixed trends across the Asian market during the third quarter of 2023. During early Q3, Butadiene prices significantly declined in the South Korean market due to weak demand from the downstream Synthetic rubber (NBR, SBR, PBR) industry. Additionally, South Korea's manufacturing purchasing manager index remained in the contraction zone (i.e., below 50 points), indicating a contraction in new orders. On the other hand, the underwhelming performance in the overseas market has resulted in a continual monthly drop in South Korean exports. According to the sources, South Korea's exports fell more than expected in July, and at the steepest pace, shipments to China dropped 25.1%, the sharpest in three months, while those to the United States and the European Union also declined by 8.1% and 8.4%, respectively. Furthermore, the availability of finished stock of Butadiene was sufficient, which weighed down the prices of Butadiene in the domestic market. However, towards the end of Q3, Butadiene prices have drastically increased due to high-cost support from feedstock Naphtha. On the upstream front, crude oil prices have remained above $80/barrel with support from falling oil inventories and supply cuts from the OPEC+ group of oil producers, which proportionally impacted the prices of several downstream commodities, including Butadiene. Furthermore, the adverse weather conditions brought on by Typhoon Khanun impacted the production and logistics activities, which in turn led to a supply shortage in the domestic market and supported the prices to follow an uptrend. Consequently, prices of Butadiene CFR Busan were settled at USD 900/MT during September 2023.
Europe
Prices of Butadiene have witnessed mixed sentiments across the European market throughout the third quarter of 2023. Butadiene prices have decreased drastically in the French market during the initial of Q3. The global economic headwinds such as spiraling inflationary pressure and rising interest rates by the central bank, have impacted the purchasing power of end-users. Meanwhile, demand for Butadiene from the downstream synthetic rubber (NBR, SBR, PBR) as well as from polymer (ABS) industries has subdued in the domestic market, which weighed down the prices of Butadiene. The market transactions were relatively weak as the enthusiasm of the terminal firm to enter the market was not strong. On the input energy front, natural gas prices have also remained on the lower side amid sufficient inventories and weak demand from the terminal market. On the other side, the cheap import offers from the Asian market have further pressured the prices of Butadiene. In addition, a major producer of Butadiene reported a 25% decline in sales during Q2 of 2023 amid low demand. However, during the mid and final of Q3, Butadiene prices have gained an upward trend in the domestic market. The feedstock Naphtha prices have increased, resulting in the high production cost of Butadiene in the domestic market. On the other side, global crude oil prices are on the upswing, driven by anticipation of extended production cuts by OPEC+ nations, which pressurizing the price realizations of feedstock Naphtha prices to stay optimistic. Furthermore, the manufacturing firms were operating at reduced rates as demand from the downstream industry was not fully recovered. The level of inventories was sufficient to cater to overall downstream demand. Therefore, prices of Butadiene FD Le Havre were settled at USD 706/MT during September 2023.
For the Quarter Ending June 2023
North America
Butadiene prices have shown fluctuating trends in the US market during the second quarter of 2023. During the early Q2, Butadiene prices slightly raised in the domestic market as demand from the downstream synthetic rubber, particularly from SBR, increased. Furthermore, imports from Asia and other exporting nations have remained slow as the closure of some terminals of US ports amid a shortage of dockworkers led to a supply shortage in the domestic market. Although, towards the end of quarter 2023, Butadiene prices have drastically drooped due to limited demand and sufficient inventories in the domestic market. The global economic headwinds, such as spiraling inflationary pressure, tightened monetary policies, and rising interest rates by the central bank to combat inflation, have hampered the market growth of Butadiene. Although the automotive and construction sector has continued to gain pace due to sufficient inventories among the end-users, demand for Butadiene has decreased in the domestic market. In addition, freight charges from East Asia/China to the US have continued to decline, which further weighed down the prices of Butadiene in the domestic market. As a result, prices of Butadiene CFR USGC were assessed at USD 740/MT with a month-on-month decrement of USD 214/MT during June 2023.
Asia - Pacific
Butadiene prices have remained on the lower end in the South Korean market throughout the second quarter of 2023, backed by weak feedstock prices. The inquiries from the polymer (ABS) industries have remained on the lower side in the domestic market. The market transactions were relatively average as the enthusiasm of the terminal firms to enter the market was not strong. At the same time, demand from the Chinese market also slowdown amid weak economic recovery, which weighed down the prices of Butadiene. Although, demand from other sectors like synthetic rubber (NBR, SBR) has remained active, and it didn’t lead to an increase in the price realization of Butadiene in the domestic market. In addition, the South Korean purchasing manager’s index has improved slightly but is still below the bar performance (i.e., 48.1 to 48.4 in May), signifying a production, new orders, and exports remained in contraction territory. Furthermore, Hanwha Total Energies Petrochemical and Hyundai Chemical, Daesan South Korea, have shut down their Butadiene plant for a maintenance turnaround. However, it had not impacted the prices of Butadiene at a very broader level. Therefore, prices of Butadiene CFR Busan were assessed at USD 682/MT with a monthly decrement of 21.3% during June 2023.
Europe
Overall, Butadiene prices have shown a bearish trend in the France market throughout the second quarter of 2023. The manufacturers were reluctant to destock the current stocks to start fresh production in the domestic market. As a result, the market participants have opted the successive reduction to stimulate the shipments. On the demand front, the inquiries from the downstream synthetic rubber (NBR, SBR) have remained moderate in the domestic market. At the same time, demand from other sectors, like the polymer (ABS) sector, has remained soft due to the slowdown in construction industries amidst high inflationary pressure and rising interest rates, weighing down the prices of Butadiene in the domestic market. In addition, the trade Union has hampered the transport and refinery operation in the French market strikes against the rise in the minimum pension age. Although, the higher inflationary pressure has promoted the production facilities to operate at a low level to avoid the excessive build-up of the product. Furthermore, cheap imports offered from the Asian market have further supported the Butadiene to follow the downtrend in the domestic market. The data shows that the manufacturing purchasing manager’s index has dropped from 47.3 in March to 45.6 in April. Furthermore, in May 2023, France witnessed a year-on-year decline in consumer price inflation from 5.9% to 5.1% in May. However, despite easing the inflation rate, the dented demand from the downstream sectors has impacted the market dynamics of Butadiene on a broader level. Thus, prices of Butadiene Le Havre were settled at USD 674/MT during June 2023.
For the Quarter Ending March 2023
North America
Butadiene prices have gained a downward trend in the USA market throughout the first quarter of 2023. The latest price decline was attributed to the region's limited inquiries and ample supply. Operating rates remained weak after stable consumption from the downstream industries. Meanwhile, a sharp decline in the freight charges improved the import availability resulting in a sufficient inventory level in the domestic market. On the other side, demand for Butadiene from the downstream synthetic rubber polymer industry has remained lackluster, further weighing down the prices of Butadiene in the domestic market. Hence, prices of Butadiene CFR USGC were settled at USD 935/MT during March.
Asia- Pacific
Throughout the first quarter of 2023, Butadiene prices increased in China since the conclusion of the Lunar New Year holidays as market participants replenished the material available in the domestic market. Although demand for Butadiene from the downstream synthetic rubber, polymer industries have remained stable in the domestic market. Operating rates have improved in the domestic market for the first time since the last quarter in the wake of stagnant consumption from the downstream industries. Meanwhile, imports from exporting countries like Singapore and Japan faced port congestion in key major Qingdao and Shanghai trading ports. Meanwhile, China faced a labor shortage after the holidays, which led to limited material availability in the China domestic market. Thus, prices of Butadiene CFR Qingdao were settled at USD 1182/MT during March.
Europe
Prices of Butadiene have witnessed mixed sentiments in the European market throughout the first quarter of 2023. During the initial Q1 of 2023, Butadiene prices declined due to weak spot demand and ample supply in the region. In addition, demand for Butadiene from the downstream synthetic rubber, polymer, and plastic industry has remained on the lower side as consumer sentiment continues to remain weak in the European region ahead of ongoing holidays and sluggish growth of the end-user automotive and construction industries which further weighed down the prices of Butadiene. However, during the mid and final of Q2, Butadiene prices increased significantly after the holidays as market participants restocked the material available in the region. Although, demand from the downstream industries has been stable in the regional market. Meanwhile, imported prices are comparatively higher than domestic prices as prices continue increasing in the Asian market. Thus, prices of Butadiene FD Hamburg were assessed at USD 915/MT during March 2023.
For the Quarter Ending December 2022
North America
Butadiene prices have continued their bearish rally in the USA market during the fourth quarter of 2022, supported by limited inquiries from the domestic market. In addition, production rates remained weak due to stable consumption rates in the domestic market. The cost of production remained stable as Natural gas prices dropped. Meanwhile, cheap imports from the Asian market amid a decline in freight charges have been the other contributing factor to the price decline. Furthermore, weak demand from synthetic rubber, polymer, and other competitive industries, along with sufficient material availability, forces the manufacturers to revise their price quotations. Thus, as a result, prices of Butadiene CFR USGC were settled at USD 1394/MT with a month-on-month declination of 9.7% during December.
Asia-Pacific
Prices of Butadiene showed mixed sentiments in the Chinese market during the fourth quarter of 2022. During the initial and mid of Q4, Butadiene prices showed a downward trend backed by excessive supply and weak demand. Furthermore, the ongoing lockdown measures in major cities amid rising pandemic cases lead to uncertainties in production, operation, and logistics. This exerted downward pressure on the end-user demand. Overall, consumption from downstream synthetic rubber, polymer, and competitive industries has continued to remain on the weak side. Most buyers have curtailed their Butadiene offtake and taken a wait-and-see attitude. Thus, prices of Butadiene CFR Qingdao were settled at USD 755/MT during November. Although, Butadiene prices rebounded during the final Q4 because of the supply constraint, disrupted supply chains, and improved demand. Overall tighter supplies and limited inventories led to the price increase in the Chinese market. As a result, prices of butadiene were settled at USD 789/MT during December.
Europe
Prices of Butadiene have witnessed a downward trend in the European market throughout the fourth quarter of 2022, backed by stable production costs and an improving supply chain. The latest decline in the trend has been caused by a steady flow of cheaper imports from the Asian and North American regions. At the same time, the domestic production cost has remained stagnant amid stable Natural gas prices. In addition, demand from the downstream synthetic rubber and plastic and other competitive industry has remained weak amid soft buying sentiments across the region. Furthermore, the port congestions were eased with better space availability, which caused the supply chain to operate normally. However, German economic sentiments have improved compared to the previous month, which could allay immediate fears of a global recession. According to IFO, the Business climate index increased from 84.5 points to 86.3 points in November 2022. Thus, in Germany, prices of Butadiene FD Hamburg were assessed at USD 645/MT during December.
For the Quarter Ending September 2022
North America
In Q3, Butadiene prices showed mixed sentiments in the North American region. In the initial part of the third quarter, prices increased, supported by the limited availability of the product in the regional market. Bullish sentiment in the feedstock market, upheaval in the energy market, and mounting inflation contributed to the high Butadiene prices. Butadiene price rose sharply by 6.9% during July. However, Butadiene prices shifted marginally towards a downward trend during H2 of the Q3, bolstered by sufficient inventories coupled with weak demand from the downstream Synthetic rubber industries. Meanwhile, the US market has struggled with constrained logistics, as interior rail hubs causing a container backlog at Long Beach have affected the supply chain. Hence, as of result, prices of Butadiene CFR USGC were USD 1813/MT with a monthly decline of more than 3% during September.
Asia- Pacific
During the third quarter of 2022, Butadiene prices showed mixed sentiments in the Asia- Pacific region. During July and August, prices plunged by 8.1% and 14.6%, respectively. The price decline was attributed to insufficient inventory and weak demand from the downstream synthetic rubber industries. Chinese manufacturing activity lapsed into slower growth with persistent demand weakness and domestic Covid-19 outbreaks throwing the country’s vast manufacturing sector into a fresh period of uncertainty. Also, the market participants have reported limited inquiries from the end-user industry for Butadiene, leading to bearish market sentiments in the domestic region. However, the energy and power crises in China were causing the increase in operating costs of Butadiene. The upstream Crude oil and Naphtha (+1.1%) prices were increased, which further prompted Butadiene to follow the upward trend during September. Hence, prices of Butadiene CFR Shanghai were assessed at USD 1209/MT throughout September.
Europe
Butadiene prices witnessed a mixed trend in the third quarter of 2022 due to fluctuating demand dynamics in Europe. In July, Butadiene prices declined by 2.6% due to the weak demand from the downstream Synthetic rubber industries. In addition, new orders fell due to inflationary pressures, low investor confidence in the outlook, and supply-chain disruptions. However, Butadiene prices have rebounded during August and September due to the limited availability of the product in the regional market. Though, speculation of recession across Europe has dampened the demand. In addition, the domestic cost of a product remains high due to mounting energy and operating costs, resulting in weak output rates. Hence, prices of Butadiene FD Hamburg were assessed at USD 1652/MT with a monthly inclination of around 4.4% during September.
For the Quarter Ending June 2022
North America
In Q2, Prices of Butadiene witnessed an upward trend in North America instead of a hampered material supply. Demand fundamentals have been buoyant throughout the region as downstream tire industries attempt to maintain the balance. However, supply witnessed disturbing dynamics in the country on the back of high input costs that led producers to raise the price of materials for domestic and international converters. Furthermore, global inflation has been forcing the prices of Butadiene to follow an upward trajectory. In addition, the USA also imports a certain percentage of its consumption from Asian and European producers. Thus, high freight charges further supported the price trend of Butadiene in the domestic market. Therefore, increased product charges partially pass the cost burden to customers to protect their profit margins.
APAC
Butadiene prices surged in the Asia-Pacific region during the second quarter of 2022, owing to boosted demand for Butadiene manufacturing synthetic rubbers. Butadiene costs have risen due to the high demand for elastomers in the region. Prices in China appeared to be growing despite an increase in Covid cases and shutdown limitations. Furthermore, the high costs of Butadiene were attributed to the skyrocketing crude oil value amidst the Russia-Ukraine war. On the other hand, demand from the end-user Elastomer segment remained firmed, which weighed on the Butadiene price in the Chinese market. Moreover, the pandemic situation in China, coupled with a prolonged war, has a negative influence on trade activities, resulting in the high maritime cost due to a shortage of containers which in turn led to the supply scarcity in the regional market, which further provoked the price of Butadiene to follow an upward trend in the upward movement.
Europe
During the second quarter of 2022, the Butadiene market reported a mixed sentiment in Europe. In the initial part of the second quarter, prices remained uphill on the back of crippling product availability in the region. Upstream Crude oil prices surged amidst the Russia-Ukraine war, and the prices rallied as the market seemed to be reviving with enhanced demand. Supply shortage and rising demand across the automotive industry resulted in the high cost of Butadiene in the region. Furthermore, surged freight charges amidst container shortage disrupted supply chains resulting in a regional supply deficit. As the upstream Crude oil prices were supported consistently by the mid-quarter, Butadiene prices shifted marginally towards a downward trend. The price decline has been attributed to the improved supplies amidst ample product availability. Demand from the downstream Elastomer segment remained bearish in June.
For the Quarter Ending March 2022
North America
In Q1 2022, the Butadiene prices showed varied sentiments in North America. At the initial part of the quarter prices remained plunged initially and later recovered. During January, the prices dropped significantly by 10% as compared to last quarter of 2021. The initial decline in the prices was attributed to the abundant supplies and weak trading activities. Demand from downstream Styrene Butadiene Rubber (SBR) and Acrylonitrile Butadiene Styrene (ABS) plastic has remained bearish in the region. As the upstream Crude and Natural gas prices rallied upwards by the mid quarter, the Butadiene sentiments shifted marginally towards the upward side in USA. Korea, a major exporter of Butadiene exported the product in USA at sky high values due to soaring freight charges. The prices of Butadiene FD Texas were last assessed at USD1445/MT during March in USA. Moreover, robust demand from downstream derivatives SBR and PBR kept the Butadiene prices on the higher side.
Asia Pacific
Prices of Butadiene climbed up in the Asia-Pacific region during the first quarter of 2022, owing to increased demand for Butadiene in the manufacturing of synthetic rubbers. Butadiene costs have risen due to increased demand for elastomers in the region. High upstream crude oil prices, as well as a scarcity of supply in the region as a result of Russia's invasion of Ukraine, had a substantial impact on production rates and operational costs. Because there was no competition, the rising value of upstream Crude oil put pressure on industries to meet downstream demand. As a result, the crisis in Ukraine severely hampered supply networks. Butadiene Ex-Dahej prices in India were estimated at USD 1576/MT in the third quarter, 5% up from the previous quarter.
Europe
In contrast to the last quarter of 2021, Butadiene showed positive market sentiments in Europe during Q1 2022. Prices remained on the uphill on the back of crippling availability of the product in the region. Upstream crude oil prices surged amidst the Russia-Ukraine conflict and the prices rallied as the market seemed to be reviving with enhanced demand. Supply shortage and rising demand across the automotive industry resulted in the high price of Butadiene in the region. Furthermore, increased freight charges due to container shortage disrupted supply chains resulting in a supply shortfall in the region. The prices of Butadiene FD Hamburg were assessed to be USD1350/MT in March 2022.
For the Quarter Ending December 2021
North America
In Q4, the Butadiene dropped to its lowest compared to Q2 and Q2. The decline in the prices were accelerated by sudden drop in the prices in October due to sufficient supply and weak trading environment. The market was also affected by the supply contraction caused by capacity addition in China. On the other hand, the weak demand in North America had an effect on trades from Asia which has likewise prompted oversupply for the chemical in the Asian business sectors. The interest from the downstream Styrene Butadiene Rubber (SBR) and Acrylonitrile Butadiene Styrene (ABS) plastic has been frail. This likewise had a disadvantage impact on the costs of Butadiene in US. In the last week of December, the prices of Butadiene in US slipped to $1220/ton FD Texas.
Asia Pacific
Asian Butadiene dropped $35/ton day on day to $555/MT CFR China observed on 30 Dec, it was the lowest price which hit since August 2020. The bearish demand was accelerated by dragged sentiments in China as the production rises. With the weaker Butadiene market and rising of CFR Japan naphtha benchmark rose $6.75/MT to $742/MT and the spread for Butadiene and Naphtha moved further negative territory in the last week of December. Amid bearish market in China, Asian suppliers had continued to seek opportunity to export outside Asia. In India, the prices of Butadiene slipped to $1527/ton Ex-Dahej with the decline of 14% compared with October 2021 where prices were $1740/ton Ex-Dahej.
Europe
In Q4, the prices of Butadiene slipped down compared with Q2 and Q3 amid sufficient supply and weak trading environment. The bearish sentiment of Feedstock Butane dominates the European market as the deteriorating demand affect the producers. Local producers had revised the prices of Butadiene to the lower end as the high inventories among the traders and less interest of consumers resulted in such trajectory. Downstream Synthetic Rubber, SBR and Thermoplastic rubber market also fell in this quarter due to weak sales and revenue from the major enterprises. In December, the new restrictions imposed across Europe against the spread of Omicron variant and resulted concern over demand outlook for rubber created negative impact in the industries.
For the Quarter Ending September 2021
North America
In Q3 2021, North America market experienced a marginal surge in the prices of Butadiene backed by its constrained availability amidst the high demand from the downstream sectors such as rubber, automobile, and others. In addition, the price hike was driven by some other factors such as rise in the prices of feedstocks Propylene and Ethylene following the shutdown of several production plants in the Gulf Coast of the USA ahead of the Ida hurricane as a part of contingency plan. Phillips 66, a major producer of Propylene imposed a temporary turnaround at its Propylene production plant in Louisiana as a repercussion of the Ida hurricane in August for around 2 weeks. Hence, curtailment in the production rates and sturdy offtakes from the downstream sectors contributed to the inflation in the prices of Butadiene in the region.
Asia pacific
During the third quarter of 2021, Butadiene market showcased mixed sentiments in the Asian region. In China, hike in the pricing trend was observed from July to August because of the congestion on several ports of China. However, in September, a fall in the prices of Butadiene was registered owing to the resumption in production but feeble demand from downstream industries. FOB Qingdao Butadiene prices stood at USD 1619/MT in July and reached USD 1710/ MT in August. In India, a downward trajectory was witnessed by the Butadiene market backed by the infirm domestic demand from the downstream rubber industry and adequate availability of the product. In the Indian market, Butadiene pricing observed a downtrend and experienced a decline by USD 303.59/MT from July to September.
Europe
In Europe, Butadiene market outlook witnessed mixed sentiments during the third quarter of 2021 backed by the high production rates as well as the sturdy demand from the downstream tire and rubber sectors. Moreover, as European countries are among the major exporters of Butadiene globally, substantial pressure is being observed in the European Butadiene market to cope with the export demand from the USA. Exorbitant freight charges across the Europe-US & Europe-Asia interoceanic trade routes and limited container availability soared Butadiene prices in this quarter.
For the Quarter Ending June 2021
North America
As the Industrial Infrastructure recovered from the impact of winter storm Uri, Butadiene supply conditions improved compared to the previous quarter. Despite easing supplies, the regional market still witnessed short availability of Butadiene. Few BD producers in the US Gulf region were struggling to operate at normal run rates. US Butadiene Contract Price (CP) increased by 75% quarter-on-quarter. Demand remained exceptionally strong from the downstream rubber producers as the sentiment to replenish the inventories were strong among the spot buyers. Downstream NBR offtakes were consistent from the automotive sector even though the automobile production was hindered amidst the semiconductor chipset shortage. Butadiene pricing first inclined and then stabilized in the second quarter with FOB Texas discussion record to record highs at USD 1440 per tonne levels in May.
Asia pacific
During the second quarter of 2021, the supplies of Butadiene remained balanced as the production rate at manufacturing plants were ample to meet the downstream end use demand. But some production lags were witnessed amid the May Day holidays in China. BD exports volumes were running low in South Korea, while some reported surged consumption of natural rubber as negatively impacting the market trend. Demand was consistent from the downstream SBR and ABS sector, backed by strong overseas enquiries from North American. Overall, the Chinese BD pricing was on downtrend with FOB Dalian prices declined showing a fall of 8.78 % quarter-on-quarter to USD 1828 per tonne by the ending of second quarter.
Europe
During the second quarter of 2021, Butadiene market reported mixed sentiments owing to the increased operating rates at several manufacturing facilities. However, the export demand from the USA put significant pressure on the European Butadiene market. Demand surged as most USA buyers preferred the European shipments over Northeast Asian cargoes due to lesser freight charges and high import duties by US government on the Chinese origin materials. Product offtakes surged from the downstream tire industries to meet the demand from recovering automotive sector. As a repercussion, the pricing trend in the European market remains supported by the tight supply and high demand.
For the Quarter Ending March 2021
North America
BD supplies in the North American region remained affected early in Q1 2021 as major plants in the US ended their turnarounds in late January which increased their production efficiencies. However, disruptions caused by the severe freeze weather conditions forced several producers to halt the manufacturing activities. However, the demand surged from downstream sectors due to the anticipation of downstream producers to restock their inventories ahead of the upcoming high demand seasons. Amidst disrupted supply, April settlements were heard at higher rates. Butadiene FOB Lousiana prices were heard above USD 1000 per Mt in March, up from USD 900 per Mt levels noted in February.
Asia-Pacific (APAC)
The supply of Butadiene eased during the first quarter, owing to the addition of new capacities in China, further supported by the scheduled start up of 130 KTPA BD unit in South Korea. The addition of new capacities kept the domestic market amply supplied with greater spot availability of Butadiene during Q1 2021. However, the demand slumped in the region amid the second COVID wave resulting in partial lockdowns in several economies, followed by lack of offtakes amid Chinese Lunar new year holidays. In the Indian markets, prices witnessed an uptrend to quarterly average of USD 1244/ton amid the strong consumption from the downstream ABS and SBR sectors.
Europe
BD supplies in the European region were balanced during Q1 2021, as the major producers completed their turnaround period in early January. The demand surged from the downstream sectors. Due to the second lockdown largely impacting the European downstream market. The European BD industry, which is largely dependent on exports, specifically to the Asian region regarded strong buying appetite from the Asian countries.
For the Quarter Ending September 2020
North America
Butadiene supply remained mixed because of the resumption in downstream operations and unexpected outages created uncertainty over Product availability remained tighter because one of the largest BD producers, BASF Total, turned around its US Port Arthur, Texas steam cracker for a larger part of the quarter, thereby affecting the export activity. The resumption of several downstream Styrene Butadiene Rubber (SBR) plants and tyre manufacturing units after Hurricane Laura added to the production losses pressured the BD producers to ramp up run rates. The news of one of the largest BD consumers, INVISTA shutting its 480 KTPA Texas Adiponitrile site pressured the sentiments. As the US’ automotive sector started clawing back to recover the losses, demand picked up from August onwards, causing prices to register strong quarterly gains to assess around USD 685 per tonne FOB US Gulf in September.
Asia
Butadiene demand across Asia remained subjected to strong fluctuations hit by a possible decline in in the production at the downstream synthetic rubber market. Prices remained oscillating between crests and troughs as producers faced supply constraints amid dampened demand from the downstream synthetic rubber producers. By the end of August, spot BD prices in China surged to USD 830 per tonne, showing a double-digit increase from the start of the month. In the northeast Asia, spot BD offers were raised by about 17.5% from the levels observed in July, with producers striving to widen product margins amid players longing for a much-needed revival in the downstream rubber sectors. Market outlook remained under pressure amid anticipations that the Butadiene supply in China will grow with new capacities coming on stream in the fourth quarter. In September however, new supply hit the market as Liaoning Bora LyondellBasell’s plant started production of BD in the Liaoning province of northeastern China and started auctioning cargoes.
Europe
Butadiene supply was weighed under the demand downturn at the start of Q3, but some unexpected C-4 cracker shutdowns helped in offsetting the market surplus. Towards the end of Q3, demand started to pick up the lost uptrend in line with increasing downstream tire and automobile production though producers remained wary about the overall recovery until the COVID-19 pandemic abated. Inventory levels were low as several synthetic rubber producers were able to ramp rates up. As per market estimates, the European market in Q3 was primarily driven by the buoyant demand from Asia which was heard turning more positive than in the last five months.
