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Weak Demand Drives Down the Butadiene Prices in the Global Market

Weak Demand Drives Down the Butadiene Prices in the Global Market

Weak Demand Drives Down the Butadiene Prices in the Global Market

  • 09-Nov-2022 6:00 PM
  • Journalist: Gabreilla Figueroa

Butadiene prices have continued to decrease across the global market during the week ending 4th November 2022. The looming recession, subdued demand, shutdown in China, and tumbling energy prices have burdened the market growth of Butadiene.

As per the data, prices of Butadiene have shown stability with a marginal decline of 0.8% in the Chinese market in the wake of low feedstock Raffinate cost. In addition, the strict Covid containment approach in the domestic region and the dropping crude oil prices amid fear of recession have weakened the market sentiments for Butadiene. Conversely, the number of infected Covid cases has been climbing in China and will result in more preventive measures, pressuring the demand outlook for Butadiene. Moreover, in China, imports have also been slowing down amidst soft inquiries from the synthetic rubber and plastic industries. Hence, as a result, prices of Butadiene in China were settled at USD 785/MT on 4th November 2022.

Similarly, in Japan, manufacturing activity weakened amid a decline in output. Also, the inflows of new export orders have slumped due to exacerbating conditions in China and South Korea, forcing the manufacturer to revise their price quotations. As a result, prices of Butadiene dropped by around 2% during the same time frame.

Additionally, Butadiene prices have dropped by 7.5%, 8.1%, and 7.4% in Germany, the Netherlands, and the UK, respectively. The latest decline in Butadiene prices was attributed to adequate material availability and sluggish demand from the downstream sectors. Although, the domestic cost of production remained elevated amidst high energy and operating cost, resulting in a weak output rate. Furthermore, the supply chain was functioning normally, leading to low-cost imports from the USA and Asian region. Additionally, port congestion, vessel bunching, and yard occupancy rates have eased in the region. As a result, the supply chain's consistency bolstered the lower market price of Butadiene. In conclusion, Butadiene FD Hamburg (Germany) prices settled at USD 1204/MT.

Meanwhile, in the USA market, sufficient inventory levels and bearish demand from the end-user synthetic rubber and allied industries have declined the product price. Consequently, prices of Butadiene were assessed at USD1553/MT with a weekly inclination of around 2.8% during the previous week.

According to ChemAnalyst estimation, "Butadiene prices have further dropped in the global market during the upcoming week owing to weak demand from the end-user synthetic rubber and other value chains."

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