Butadiene Prices Continue to Increase Across the Asian and European Markets

Butadiene price has witnessed an upward trend in the Asia and European markets, backed by the improved buying sentiment in the region. In addition, volatile energy prices, the reopening of the Chinese market, high Asian import prices, and sanctions on Russian imports by the European Union further accelerated the prices of Butadiene in the respective regions.

The prices of Butadiene in the European market have significantly strengthened as manufacturers replenished the material available in the domestic market. However, the demand for Butadiene from end-user Synthetic Rubber and Polymer industries has remained stable in the market. Meanwhile, imported Butadiene prices have been comparatively higher than domestic prices due to the continued price increase in the Asian market. Moreover, the European Union (EU) has adopted its tenth package of sanctions, including Synthetic Rubber and Carbon Black. Sibur, the largest Russian producer of Synthetic Rubbers, is likely to face the brunt of the import ban. It has been observed that Russian Synthetic Rubber imports have been dropping sharply in the EU since the beginning of the Ukraine war. However, the impact of the ban on the European Synthetic Rubber market remains to be seen. In Germany, prices of Butadiene FD Hamburg were settled at USD 901/MT with a weekly increment of USD 114/MT during the week ending 24th February 2023.

Similarly, Butadiene prices have been higher in the Chinese market due to improved demand from downstream Polymers, Synthetic Rubber, and other competitive industries after the holidays. In terms of domestic production, operating rates have improved due to increased consumption of Butadiene from the downstream industries. Meanwhile, imports from exporting countries have become costly as prices have risen in exporting countries like Singapore and Japan. On the other hand, Chinese manufacturing activity expanded in February 2023 as factories began to return following normal years of Covid-19 disruption. According to the National Bureau of Statistics, the official purchasing managers' index grew from 49.2 to 51.6 in February. Furthermore, NBS statistician Zhao Qinghe stated, "with the effect of the holidays and the repercussions of the epidemic fading away, the recovery of production by manufacturing companies accelerated, and demand continues to rise." As a result, Butadiene prices were settled at USD 1233/MT with a week-on-week increment of USD 56/MT on 24th February 2023.

According to ChemAnalyst, "Butadiene prices are anticipated to intensify across Asian and European markets in the coming quarters of 2023. Additionally, demand from downstream Synthetic Rubber, Polymer, and other industries is expected to increase in Q2 and Q3 of 2023 as it is the major demand season for the automotive and construction industries".