For the Quarter Ending March 2022
In Q1 2022, the Butadiene prices showed varied sentiments in North America. At the initial part of the quarter prices remained plunged initially and later recovered. During January, the prices dropped significantly by 10% as compared to last quarter of 2021. The initial decline in the prices was attributed to the abundant supplies and weak trading activities. Demand from downstream Styrene Butadiene Rubber (SBR) and Acrylonitrile Butadiene Styrene (ABS) plastic has remained bearish in the region. As the upstream Crude and Natural gas prices rallied upwards by the mid quarter, the Butadiene sentiments shifted marginally towards the upward side in USA. Korea, a major exporter of Butadiene exported the product in USA at sky high values due to soaring freight charges. The prices of Butadiene FD Texas were last assessed at USD1445/MT during March in USA. Moreover, robust demand from downstream derivatives SBR and PBR kept the Butadiene prices on the higher side.
Prices of Butadiene climbed up in the Asia-Pacific region during the first quarter of 2022, owing to increased demand for Butadiene in the manufacturing of synthetic rubbers. Butadiene costs have risen due to increased demand for elastomers in the region. High upstream crude oil prices, as well as a scarcity of supply in the region as a result of Russia's invasion of Ukraine, had a substantial impact on production rates and operational costs. Because there was no competition, the rising value of upstream Crude oil put pressure on industries to meet downstream demand. As a result, the crisis in Ukraine severely hampered supply networks. Butadiene Ex-Dahej prices in India were estimated at USD 1576/MT in the third quarter, 5% up from the previous quarter.
In contrast to the last quarter of 2021, Butadiene showed positive market sentiments in Europe during Q1 2022. Prices remained on the uphill on the back of crippling availability of the product in the region. Upstream crude oil prices surged amidst the Russia-Ukraine conflict and the prices rallied as the market seemed to be reviving with enhanced demand. Supply shortage and rising demand across the automotive industry resulted in the high price of Butadiene in the region. Furthermore, increased freight charges due to container shortage disrupted supply chains resulting in a supply shortfall in the region. The prices of Butadiene FD Hamburg were assessed to be USD1350/MT in March 2022.
For the Quarter Ending December 2021
In Q4, the Butadiene dropped to its lowest compared to Q2 and Q2. The decline in the prices were accelerated by sudden drop in the prices in October due to sufficient supply and weak trading environment. The market was also affected by the supply contraction caused by capacity addition in China. On the other hand, the weak demand in North America had an effect on trades from Asia which has likewise prompted oversupply for the chemical in the Asian business sectors. The interest from the downstream Styrene Butadiene Rubber (SBR) and Acrylonitrile Butadiene Styrene (ABS) plastic has been frail. This likewise had a disadvantage impact on the costs of Butadiene in US. In the last week of December, the prices of Butadiene in US slipped to $1220/ton FD Texas.
Asian Butadiene dropped $35/ton day on day to $555/MT CFR China observed on 30 Dec, it was the lowest price which hit since August 2020. The bearish demand was accelerated by dragged sentiments in China as the production rises. With the weaker Butadiene market and rising of CFR Japan naphtha benchmark rose $6.75/MT to $742/MT and the spread for Butadiene and Naphtha moved further negative territory in the last week of December. Amid bearish market in China, Asian suppliers had continued to seek opportunity to export outside Asia. In India, the prices of Butadiene slipped to $1527/ton Ex-Dahej with the decline of 14% compared with October 2021 where prices were $1740/ton Ex-Dahej.
In Q4, the prices of Butadiene slipped down compared with Q2 and Q3 amid sufficient supply and weak trading environment. The bearish sentiment of Feedstock Butane dominates the European market as the deteriorating demand affect the producers. Local producers had revised the prices of Butadiene to the lower end as the high inventories among the traders and less interest of consumers resulted in such trajectory. Downstream Synthetic Rubber, SBR and Thermoplastic rubber market also fell in this quarter due to weak sales and revenue from the major enterprises. In December, the new restrictions imposed across Europe against the spread of Omicron variant and resulted concern over demand outlook for rubber created negative impact in the industries.
For the Quarter Ending September 2021
In Q3 2021, North America market experienced a marginal surge in the prices of Butadiene backed by its constrained availability amidst the high demand from the downstream sectors such as rubber, automobile, and others. In addition, the price hike was driven by some other factors such as rise in the prices of feedstocks Propylene and Ethylene following the shutdown of several production plants in the Gulf Coast of the USA ahead of the Ida hurricane as a part of contingency plan. Phillips 66, a major producer of Propylene imposed a temporary turnaround at its Propylene production plant in Louisiana as a repercussion of the Ida hurricane in August for around 2 weeks. Hence, curtailment in the production rates and sturdy offtakes from the downstream sectors contributed to the inflation in the prices of Butadiene in the region.
During the third quarter of 2021, Butadiene market showcased mixed sentiments in the Asian region. In China, hike in the pricing trend was observed from July to August because of the congestion on several ports of China. However, in September, a fall in the prices of Butadiene was registered owing to the resumption in production but feeble demand from downstream industries. FOB Qingdao Butadiene prices stood at USD 1619/MT in July and reached USD 1710/ MT in August. In India, a downward trajectory was witnessed by the Butadiene market backed by the infirm domestic demand from the downstream rubber industry and adequate availability of the product. In the Indian market, Butadiene pricing observed a downtrend and experienced a decline by USD 303.59/MT from July to September.
In Europe, Butadiene market outlook witnessed mixed sentiments during the third quarter of 2021 backed by the high production rates as well as the sturdy demand from the downstream tire and rubber sectors. Moreover, as European countries are among the major exporters of Butadiene globally, substantial pressure is being observed in the European Butadiene market to cope with the export demand from the USA. Exorbitant freight charges across the Europe-US & Europe-Asia interoceanic trade routes and limited container availability soared Butadiene prices in this quarter.
For the Quarter Ending June 2021
As the Industrial Infrastructure recovered from the impact of winter storm Uri, Butadiene supply conditions improved compared to the previous quarter. Despite easing supplies, the regional market still witnessed short availability of Butadiene. Few BD producers in the US Gulf region were struggling to operate at normal run rates. US Butadiene Contract Price (CP) increased by 75% quarter-on-quarter. Demand remained exceptionally strong from the downstream rubber producers as the sentiment to replenish the inventories were strong among the spot buyers. Downstream NBR offtakes were consistent from the automotive sector even though the automobile production was hindered amidst the semiconductor chipset shortage. Butadiene pricing first inclined and then stabilized in the second quarter with FOB Texas discussion record to record highs at USD 1440 per tonne levels in May.
During the second quarter of 2021, the supplies of Butadiene remained balanced as the production rate at manufacturing plants were ample to meet the downstream end use demand. But some production lags were witnessed amid the May Day holidays in China. BD exports volumes were running low in South Korea, while some reported surged consumption of natural rubber as negatively impacting the market trend. Demand was consistent from the downstream SBR and ABS sector, backed by strong overseas enquiries from North American. Overall, the Chinese BD pricing was on downtrend with FOB Dalian prices declined showing a fall of 8.78 % quarter-on-quarter to USD 1828 per tonne by the ending of second quarter.
During the second quarter of 2021, Butadiene market reported mixed sentiments owing to the increased operating rates at several manufacturing facilities. However, the export demand from the USA put significant pressure on the European Butadiene market. Demand surged as most USA buyers preferred the European shipments over Northeast Asian cargoes due to lesser freight charges and high import duties by US government on the Chinese origin materials. Product offtakes surged from the downstream tire industries to meet the demand from recovering automotive sector. As a repercussion, the pricing trend in the European market remains supported by the tight supply and high demand.
For the Quarter Ending March 2021
BD supplies in the North American region remained affected early in Q1 2021 as major plants in the US ended their turnarounds in late January which increased their production efficiencies. However, disruptions caused by the severe freeze weather conditions forced several producers to halt the manufacturing activities. However, the demand surged from downstream sectors due to the anticipation of downstream producers to restock their inventories ahead of the upcoming high demand seasons. Amidst disrupted supply, April settlements were heard at higher rates. Butadiene FOB Lousiana prices were heard above USD 1000 per Mt in March, up from USD 900 per Mt levels noted in February.
The supply of Butadiene eased during the first quarter, owing to the addition of new capacities in China, further supported by the scheduled start up of 130 KTPA BD unit in South Korea. The addition of new capacities kept the domestic market amply supplied with greater spot availability of Butadiene during Q1 2021. However, the demand slumped in the region amid the second COVID wave resulting in partial lockdowns in several economies, followed by lack of offtakes amid Chinese Lunar new year holidays. In the Indian markets, prices witnessed an uptrend to quarterly average of USD 1244/ton amid the strong consumption from the downstream ABS and SBR sectors.
BD supplies in the European region were balanced during Q1 2021, as the major producers completed their turnaround period in early January. The demand surged from the downstream sectors. Due to the second lockdown largely impacting the European downstream market. The European BD industry, which is largely dependent on exports, specifically to the Asian region regarded strong buying appetite from the Asian countries.
For the Quarter Ending September 2020
Butadiene demand across Asia remained subjected to strong fluctuations hit by a possible decline in in the production at the downstream synthetic rubber market. Prices remained oscillating between crests and troughs as producers faced supply constraints amid dampened demand from the downstream synthetic rubber producers. By the end of August, spot BD prices in China surged to USD 830 per tonne, showing a double-digit increase from the start of the month. In the northeast Asia, spot BD offers were raised by about 17.5% from the levels observed in July, with producers striving to widen product margins amid players longing for a much-needed revival in the downstream rubber sectors. Market outlook remained under pressure amid anticipations that the Butadiene supply in China will grow with new capacities coming on stream in the fourth quarter. In September however, new supply hit the market as Liaoning Bora LyondellBasell’s plant started production of BD in the Liaoning province of northeastern China and started auctioning cargoes.
Butadiene supply remained mixed because of the resumption in downstream operations and unexpected outages created uncertainty over Product availability remained tighter because one of the largest BD producers, BASF Total, turned around its US Port Arthur, Texas steam cracker for a larger part of the quarter, thereby affecting the export activity. The resumption of several downstream Styrene Butadiene Rubber (SBR) plants and tyre manufacturing units after Hurricane Laura added to the production losses pressured the BD producers to ramp up run rates. The news of one of the largest BD consumers, INVISTA shutting its 480 KTPA Texas Adiponitrile site pressured the sentiments. As the US’ automotive sector started clawing back to recover the losses, demand picked up from August onwards, causing prices to register strong quarterly gains to assess around USD 685 per tonne FOB US Gulf in September.
Butadiene supply was weighed under the demand downturn at the start of Q3, but some unexpected C-4 cracker shutdowns helped in offsetting the market surplus. Towards the end of Q3, demand started to pick up the lost uptrend in line with increasing downstream tire and automobile production though producers remained wary about the overall recovery until the COVID-19 pandemic abated. Inventory levels were low as several synthetic rubber producers were able to ramp rates up. As per market estimates, the European market in Q3 was primarily driven by the buoyant demand from Asia which was heard turning more positive than in the last five months.