Butadiene Prices Surged Globally owing to the Escalating Upstream Values

Butadiene prices have been rising in the global market as Upstream Crude oil prices continue to surge. Higher demand from Butadiene especially in the Automotive industry has been driving the prices higher as Butadiene is used in the manufacture of elastomers. As per the ChemAnalyst database, the prices of Butadiene in FD Texas USA were assessed at 1445 USD/MT in March while quotations in the FD Hamburg Germany were assessed at 1350/MT.

The ongoing crisis between Russia and Ukraine has been substantially influencing the production rates and operational expenses for a range of commodities, including high prices of feedstock Naphtha and other upstream products. The rising value of upstream Crude oil makes it difficult for the downstream manufacturers to compete. As a result, the conflict in Ukraine threatens to disrupt a stressed supply chain drastically.

In the USA, Butadiene prices began to rise, and the market started to expand, despite high oil and natural gas prices. Butadiene suppliers in South Korea are seeking the US market to shift their cargoes, and the price differential between CFR China and FOB Korea is widening. The market was seen strong as being driven by consumer market with soaring Bio-Butadiene demand and a gradual increase in the consumption and inventory usage among businesses. The need for Butadiene is driven by the automobile industry, which uses it to make downstream elastomers including Styrene-Butadiene Rubber (SBR) and Polybutadiene Rubber (PBR) for tires. The synthetic rubber supply chain was also disrupted due to the ongoing conflict between Russia and Ukraine, which disrupted the supplies from Russia to the United States.

As per ChemAnalyst, “Butadiene prices are expected to increase further with the surging upstream Crude oil prices in the coming weeks. Meanwhile, demand from the downstream elastomers and other commodities is expected to remain high in the upcoming month.”