Butadiene Prices Continue to Have a Downward Trend in the USA and European Market

Butadiene prices have persisted in witnessing a bearish rally in the USA and Europe during the first week of December 2022. Low offtakes from the downstream market, lower imported prices, sufficient inventory level, and stable energy prices have supported the current price trend of Butadiene.

Prices of Butadiene have declined in the European market owing to the continued feeble cost support and stability in the Natural gas prices. Low Asian imports, coupled with the drop in the freight charges from Asia to Europe, have the other factor for the price decline. In addition, demand for Butadiene from end users such as synthetic rubber, plastic, and polymer industries has remained weak amid sluggish consumer confidence in the regional market. According to the ifo report, Germany may avert the recession, whose threat loomed large in the previous months. Also, the downstream manufacturer has ample inventory levels, forcing producers to reduce stock levels by lowering the prices. Additionally, the official Purchasing Manager Index (PMI) was recorded at 48.0 in November 2022, compared to 49.2 in the previous month, according to NBS-published data. In conclusion, prices of Butadiene FD Hamburg were assessed at USD 927/MT on 2nd December 2022.

Similarly, in the USA market, production rates remained weak in the wake of stable consumption rates in the domestic market. Meanwhile, imports from Asia Pacific have improved amid a decline in freight charges. In addition, demand for Butadiene from downstream synthetic rubber and allied industries have remained stable as consumer sentiment remains sluggish in the USA. Meanwhile, demand from the overseas market also remained on the weak side. On the other side, US Federal Reserve continued to tighten the monetary policy to curtail inflation. Furthermore, according to the data, manufacturing activity in the USA contracted in November 2022. PMI has dropped from 50.2 to 49.0 compared with the previous month. Hence, as a result, Butadiene prices were settled at USD 1456/MT with a weekly declination of 5.5% during the same time frame.

According to ChemAnalyst anticipation, "Butadiene prices will expect to decline in the USA and Europe due to the slowdown in demand from the end-user synthetic rubber, plastic and other value chains. Meanwhile, destocking of the material in the early Q4 will lead to a price drop in the regional market during the upcoming weeks."