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Global Butadiene Prices Decline Due to Weak Downstream Demand

Global Butadiene Prices Decline Due to Weak Downstream Demand

Global Butadiene Prices Decline Due to Weak Downstream Demand

  • 18-Nov-2022 11:43 AM
  • Journalist: Harold Finch

Butadiene prices have continued their declining trend across the globe during the week ending 11th November 2022, backed by the gloomy demand from the downstream industries. Tumbling in energy prices, high inflation rate, and uncertainties in China have hampered the market growth of Butadiene.

According to the data, Butadiene prices plunged by around 5.8% in China's domestic market, supported by the decline in upstream crude oil prices. Demand from the end-user synthetic rubber and plastic industry has remained stable, culminating in weak pricing sentiment in China. Furthermore, imports have been cheaper, reaching China's shores because of weak international prices. Additionally, market participants reported sufficient inventories and weak buying sentiment in the market. In conclusion, prices of Butadiene CFR Qingdao were assessed at USD 747/MT during the previous week.

At the same time, Butadiene prices retained a downtrend in the European market, bolstered by sufficient material availability. The primary factor for the price drop is the steady flow of low-imported material from the exporting countries, particularly from Japan and Singapore, along with a reduction in the freight rates from Asia to Europe. On the other hand, demand from the downstream synthetic rubber and allied industries have been stable to weak amid soft buying sentiments in the region. Although, the domestic production cost continues to remain high amidst an increase in energy and operating cost, resulting in weaker output rates. Hence, prices of Butadiene in Germany were settled at USD 1148/MT with a weekly declination of 4.7% during the preceding weeks.

Similarly, in the USA, disruption in the supply-demand of products and good stockpiling in the region reduced the Butadiene prices. Further, a steep drop in upstream crude oil prices in the wake of low demand and weak trading dynamics has supported the current price trend of Butadiene. Meanwhile, imports continue to remain inexpensive on the US shores as freight charges reach normalcy from Asia to the US, while pricing sentiment in the Asian countries continues to remain weak. Consequently, prices of Butadiene CFR USGC were assessed at USD 1541/MT during the same time frame.

According to ChemAnalyst estimation, "Butadiene prices will further decline in the global market during the upcoming weeks. Demand from the end-user synthetic rubber and plastic industry will be expected to slow down, which may impact the pricing dynamic of Butadiene."

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