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Despite Weak Demand, Butadiene Prices are Experiencing Stability in Europe

Despite Weak Demand, Butadiene Prices are Experiencing Stability in Europe

Despite Weak Demand, Butadiene Prices are Experiencing Stability in Europe

  • 12-Sep-2022 1:57 PM
  • Journalist: Patrick Knight

Butadiene prices have stagnated with a marginal rise of around 0.5%, 0.9%, and 1.0% in Germany, France, and the Netherlands, respectively, during the week ending 9th September. In contrast, demand for Butadiene from the downstream Synthetic rubber industries has been sluggish during the past couple of weeks. Additionally, recession speculation has been slowly gripping the global market, affecting the European region. However, the declining offers for upstream Raffinate, Butadiene, did not offer much cost support to the pricing dynamics of Butadiene in the regional market.

In addition, rising energy prices have increased the cost of production, which improved the cost of synthetic rubber prices and forced domestic contractors to opt for the wait-and-see approach. Consequently, demand for Butadiene plummeted during the past few weeks.

Although demand fundamentals for Butadiene are still weak, manufacturers could not avoid themselves to revise their offers to tackle high production costs. Moreover, the upcoming winter season and the recent announcement by Russia to curb supply via the Nord Stream pipeline have also influenced the market sentiments and induced pressure to utilize energy more wisely.

On the supply front, the ports are also congested in Europe, along with low water levels in the Rhine River and truck and driver shortages, causing further halts in the Butadiene supply chain. Hence, as a result, the Butadiene prices were assessed at USD 1642/Tonne in the preceding week in Germany.

According to the ChemAnalyst estimation, “European Butadiene prices will follow the upward trajectory in the upcoming weeks, as the current market scenario will not change anytime soon in the region. At the same time, natural gas shortage might affect the European market further, while significant recovery is likely in the region’s Elastomer segment.”

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