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Butadiene prices upticked owing to strengthening feedstock market

Butadiene prices upticked owing to strengthening feedstock market

Butadiene prices upticked owing to strengthening feedstock market

  • 14-Apr-2022 4:37 PM
  • Journalist: Jung Hoon

Entering the month of April, Butadiene prices have risen constantly in the global market. Due to limited supplies and strong demand from downstream sectors for the manufacturing of synthetic rubbers, prices have continued to grow. As per the ChemAnalyst database, the prices of Butadiene CFR Qingdao, China were assessed at around USD 1355/MT, while Butadiene CFR USGC, USA was settled at around USD 1560/MT during the second week of April.

The ongoing crisis between Russia and Ukraine has impacted the production rates and operational expenses for various commodities, including high upstream crude oil prices, making it difficult for the downstream manufacturers to compete. As a result, the supply chain was hampered due to the Russia-Ukraine crisis.

The downstream demand for Synthetic rubber in the Asia-Pacific region has been robust, prompting manufacturers to expand their production rates. However, due to scarcity of feedstock ethylene, companies have had to raise the cost of Butadiene production. Furthermore, due to some technical issues, one of the biggest producers of Butadiene in China, Petchem Zhejiang, has temporarily shut down its Butadiene facility, resulting in a supply deficit for downstream producers. In addition to these considerations, the Covid infection in China and the closure of numerous cities hampered the flow of upstream items from the providing countries, putting downward pressure on Butadiene pricing in the local market. Furthermore, due to the high price of crude oil, European market emotions had observed an upward trend in Butadiene pricing. Moreover, the United States sanctions on Russian oil imports raised crude oil prices in the European region.

As per ChemAnalyst, “The price of Butadiene is likely to increase in the upcoming weeks on the back of the bullish demand from the downstream industries. In the meantime, the Crude oil prices are expected to soar, which may further impact feedstock Ethylene prices in the global market”.

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