European and Asian Butadiene Prices Pressured by Weak Demand Outlook
European and Asian Butadiene Prices Pressured by Weak Demand Outlook

European and Asian Butadiene Prices Pressured by Weak Demand Outlook

  • 11-Oct-2022 5:57 PM
  • Journalist: Harold Finch

During the first week of October 2022, Butadiene prices have continued to fall in the Asia and European markets, bolstered by the weak demand from the downstream industries. The high inflation rate in Europe and shut of several cities in China have impeded the market growth of Butadiene.

As per the data, Butadiene prices have dropped by 1.3%, 1.2%, and 1.8% in Germany, Belgium, and the Netherlands, respectively. The primary factor for the price decrease was the adequate availability of the material coupled with sluggish demand from downstream synthetic rubber and other allied industries. The ratio of sales to inventories has been mismatched. In addition, the domestic cost of production has eased due to low energy and operating rates, which forced the manufacturer to revise their price quotation. The downward in natural gas prices is due to the weak demand from the industrial sector. In addition, prices at the Dutch Title Transfer Facility (TTF), Europe's leading trading hub, were on Monday hovering around €150 per megawatt-hour, falling at times below that mark after settling at €156 on Friday.

In the German market, prices of Butadiene FD Hamburg were assessed at USD1496/MT in the week ending 7th October.

Furthermore, China's economic outlook has dimmed further following its weeklong- Holiday amid Golden week (1st-7th October) and the resurgence of Covid cases in the region. In addition, Zero Covid Policy and lockdown in affected cities have hampered the production and supply chain in the domestic market. On the other hand, bearish demand for Butadiene from the Synthetic downstream rubber and other value chain industries has resulted in a price decline in the Chinese market. In contrast, the manufacturer has sufficient inventory levels to cater to the domestic demand.

Prices of Butadiene CFR Qingdao were assessed at USD 925/MT with a weekly declination of around 1.0% during the same time frame.

According to the ChemAnalyst estimation, "prices of Butadiene will likely follow the downward trajectory in the China and Germany owing to weak demand from the downstream synthetic rubber industries. Meanwhile, shutdown in China amid Zero Covid policy may impact the production and trade activity in the upcoming weeks."


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