Butadiene Prices Continue to Decline in Asia Amid Over Supply and Weak Downstream Demand
- 06-Sep-2021 3:00 PM
- Journalist: Nina Jiang
The Butadiene market decline accelerated in the beginning of September with the spot prices in China falling USD 54-70 per tonne from the price levels on August 1st. The prices dropped nearly 9% in Asia.
Butadiene prices began to decline from late July. The decline in the prices gradually accelerated from the end of August but there was a sudden drop in the prices in the September beginning due to supply concentration caused by capacity addition in China. On the other hand, the weak demand in North America had an effect on the exports from Asia which has also led to oversupply for the chemical in the Asian markets.
With the capacity addition of Zhejiang Petrochemical Phase II, Shandong Luqing Petrochemical and Gulei Petrochemical, new capacity will continue to release in September. There has not been any intimation about any routine maintenance plan in Asia. With this the prices of Butadiene are expected to continue to fall in the near term.
The demand from the downstream Styrene Butadiene Rubber (SBR) and Acrylonitrile Butadiene Styrene (ABS) plastic has been weak. This also had a downside effect on the prices of Butadiene in Asia.
Butadiene is a colourless, non-corrosive gas which is used for the production of resins and plastics which include styrene rubber, ABS, adiponitrile, nitrile rubber etc. Butadiene is mainly produced from distillation of steam crackers while producing Ethylene and Propylene. The global demand for Butadiene stood at around 12.5 million tonnes in 2020 and is expected to grow at a healthy CAGR of 3.5% in the future.
As per ChemAnalyst, “Butadiene demand has been week for the past month in Asia partially due to over supply conditions and partially due to the fall of demand from the downstream SBR and ABS in North America. With the current trend, the prices are expected to fall in the near term until the demand for the downstream SBR and ABS rises in the region as well as the exports pick up which would release the excess supply in the region.”