For the Quarter Ending September 2023
North America
Butadiene prices have witnessed a fluctuating trend in the US market during the third quarter of 2023. During July and August, Butadiene prices have inched lower in the domestic market. The pace of inquiries originating from Synthetic rubber (NBR, PBR, SBR) and Polymer (ABS) has remained subdued amidst firm inflationary pressure and high interest rates by the central bank, which deteriorated the purchasing power of end-users. Furthermore, the manufacturing purchasing manager's index remained in the contraction zone during July 2023 (i.e., below 50 points), reflecting a decline in new orders. On the other side, BASF total in Port Arthur, Texas, has a production capacity of 410,000 MT/Year and has shut down its Butadiene plant amidst maintenance turnarounds. However, during September 2023 Butadiene prices have gained an uptrend in the domestic market owing to tight supply of Butadiene. The feedstock Butane prices have increased amid strong Natural gas prices, resulting in the high production cost of Butadiene. Despite the better performance of the automotive sector, demand for Butadiene from the downstream Synthetic rubber as well as from the Polymer industry has remained weak, but it was insufficient to drive the prices of Butadiene to the lower side. Furthermore, the supply chain has been impacted by the prolonged drought in the Panama Canal and Hurricane Hilary, leading to a supply shortage in the domestic market, which promoted traders or manufacturers to revise positive quotations. As a result, prices of Butadiene CFR USGC were settled at USD 565/MT during September 2023.
Asia-Pacific
Butadiene prices have showcased mixed trends across the Asian market during the third quarter of 2023. During early Q3, Butadiene prices significantly declined in the South Korean market due to weak demand from the downstream Synthetic rubber (NBR, SBR, PBR) industry. Additionally, South Korea's manufacturing purchasing manager index remained in the contraction zone (i.e., below 50 points), indicating a contraction in new orders. On the other hand, the underwhelming performance in the overseas market has resulted in a continual monthly drop in South Korean exports. According to the sources, South Korea's exports fell more than expected in July, and at the steepest pace, shipments to China dropped 25.1%, the sharpest in three months, while those to the United States and the European Union also declined by 8.1% and 8.4%, respectively. Furthermore, the availability of finished stock of Butadiene was sufficient, which weighed down the prices of Butadiene in the domestic market. However, towards the end of Q3, Butadiene prices have drastically increased due to high-cost support from feedstock Naphtha. On the upstream front, crude oil prices have remained above $80/barrel with support from falling oil inventories and supply cuts from the OPEC+ group of oil producers, which proportionally impacted the prices of several downstream commodities, including Butadiene. Furthermore, the adverse weather conditions brought on by Typhoon Khanun impacted the production and logistics activities, which in turn led to a supply shortage in the domestic market and supported the prices to follow an uptrend. Consequently, prices of Butadiene CFR Busan were settled at USD 900/MT during September 2023.
Europe
Prices of Butadiene have witnessed mixed sentiments across the European market throughout the third quarter of 2023. Butadiene prices have decreased drastically in the French market during the initial of Q3. The global economic headwinds such as spiraling inflationary pressure and rising interest rates by the central bank, have impacted the purchasing power of end-users. Meanwhile, demand for Butadiene from the downstream synthetic rubber (NBR, SBR, PBR) as well as from polymer (ABS) industries has subdued in the domestic market, which weighed down the prices of Butadiene. The market transactions were relatively weak as the enthusiasm of the terminal firm to enter the market was not strong. On the input energy front, natural gas prices have also remained on the lower side amid sufficient inventories and weak demand from the terminal market. On the other side, the cheap import offers from the Asian market have further pressured the prices of Butadiene. In addition, a major producer of Butadiene reported a 25% decline in sales during Q2 of 2023 amid low demand. However, during the mid and final of Q3, Butadiene prices have gained an upward trend in the domestic market. The feedstock Naphtha prices have increased, resulting in the high production cost of Butadiene in the domestic market. On the other side, global crude oil prices are on the upswing, driven by anticipation of extended production cuts by OPEC+ nations, which pressurizing the price realizations of feedstock Naphtha prices to stay optimistic. Furthermore, the manufacturing firms were operating at reduced rates as demand from the downstream industry was not fully recovered. The level of inventories was sufficient to cater to overall downstream demand. Therefore, prices of Butadiene FD Le Havre were settled at USD 706/MT during September 2023.
For the Quarter Ending June 2023
North America
Butadiene prices have shown fluctuating trends in the US market during the second quarter of 2023. During the early Q2, Butadiene prices slightly raised in the domestic market as demand from the downstream synthetic rubber, particularly from SBR, increased. Furthermore, imports from Asia and other exporting nations have remained slow as the closure of some terminals of US ports amid a shortage of dockworkers led to a supply shortage in the domestic market. Although, towards the end of quarter 2023, Butadiene prices have drastically drooped due to limited demand and sufficient inventories in the domestic market. The global economic headwinds, such as spiraling inflationary pressure, tightened monetary policies, and rising interest rates by the central bank to combat inflation, have hampered the market growth of Butadiene. Although the automotive and construction sector has continued to gain pace due to sufficient inventories among the end-users, demand for Butadiene has decreased in the domestic market. In addition, freight charges from East Asia/China to the US have continued to decline, which further weighed down the prices of Butadiene in the domestic market. As a result, prices of Butadiene CFR USGC were assessed at USD 740/MT with a month-on-month decrement of USD 214/MT during June 2023.
Asia - Pacific
Butadiene prices have remained on the lower end in the South Korean market throughout the second quarter of 2023, backed by weak feedstock prices. The inquiries from the polymer (ABS) industries have remained on the lower side in the domestic market. The market transactions were relatively average as the enthusiasm of the terminal firms to enter the market was not strong. At the same time, demand from the Chinese market also slowdown amid weak economic recovery, which weighed down the prices of Butadiene. Although, demand from other sectors like synthetic rubber (NBR, SBR) has remained active, and it didn’t lead to an increase in the price realization of Butadiene in the domestic market. In addition, the South Korean purchasing manager’s index has improved slightly but is still below the bar performance (i.e., 48.1 to 48.4 in May), signifying a production, new orders, and exports remained in contraction territory. Furthermore, Hanwha Total Energies Petrochemical and Hyundai Chemical, Daesan South Korea, have shut down their Butadiene plant for a maintenance turnaround. However, it had not impacted the prices of Butadiene at a very broader level. Therefore, prices of Butadiene CFR Busan were assessed at USD 682/MT with a monthly decrement of 21.3% during June 2023.
Europe
Overall, Butadiene prices have shown a bearish trend in the France market throughout the second quarter of 2023. The manufacturers were reluctant to destock the current stocks to start fresh production in the domestic market. As a result, the market participants have opted the successive reduction to stimulate the shipments. On the demand front, the inquiries from the downstream synthetic rubber (NBR, SBR) have remained moderate in the domestic market. At the same time, demand from other sectors, like the polymer (ABS) sector, has remained soft due to the slowdown in construction industries amidst high inflationary pressure and rising interest rates, weighing down the prices of Butadiene in the domestic market. In addition, the trade Union has hampered the transport and refinery operation in the French market strikes against the rise in the minimum pension age. Although, the higher inflationary pressure has promoted the production facilities to operate at a low level to avoid the excessive build-up of the product. Furthermore, cheap imports offered from the Asian market have further supported the Butadiene to follow the downtrend in the domestic market. The data shows that the manufacturing purchasing manager’s index has dropped from 47.3 in March to 45.6 in April. Furthermore, in May 2023, France witnessed a year-on-year decline in consumer price inflation from 5.9% to 5.1% in May. However, despite easing the inflation rate, the dented demand from the downstream sectors has impacted the market dynamics of Butadiene on a broader level. Thus, prices of Butadiene Le Havre were settled at USD 674/MT during June 2023.
Butadiene prices have gained a downward trend in the USA market throughout the first quarter of 2023. The latest price decline was attributed to the region's limited inquiries and ample supply. Operating rates remained weak after stable consumption from the downstream industries. Meanwhile, a sharp decline in the freight charges improved the import availability resulting in a sufficient inventory level in the domestic market. On the other side, demand for Butadiene from the downstream synthetic rubber polymer industry has remained lackluster, further weighing down the prices of Butadiene in the domestic market. Hence, prices of Butadiene CFR USGC were settled at USD 935/MT during March.
Throughout the first quarter of 2023, Butadiene prices increased in China since the conclusion of the Lunar New Year holidays as market participants replenished the material available in the domestic market. Although demand for Butadiene from the downstream synthetic rubber, polymer industries have remained stable in the domestic market. Operating rates have improved in the domestic market for the first time since the last quarter in the wake of stagnant consumption from the downstream industries. Meanwhile, imports from exporting countries like Singapore and Japan faced port congestion in key major Qingdao and Shanghai trading ports. Meanwhile, China faced a labor shortage after the holidays, which led to limited material availability in the China domestic market. Thus, prices of Butadiene CFR Qingdao were settled at USD 1182/MT during March.
Prices of Butadiene have witnessed mixed sentiments in the European market throughout the first quarter of 2023. During the initial Q1 of 2023, Butadiene prices declined due to weak spot demand and ample supply in the region. In addition, demand for Butadiene from the downstream synthetic rubber, polymer, and plastic industry has remained on the lower side as consumer sentiment continues to remain weak in the European region ahead of ongoing holidays and sluggish growth of the end-user automotive and construction industries which further weighed down the prices of Butadiene. However, during the mid and final of Q2, Butadiene prices increased significantly after the holidays as market participants restocked the material available in the region. Although, demand from the downstream industries has been stable in the regional market. Meanwhile, imported prices are comparatively higher than domestic prices as prices continue increasing in the Asian market. Thus, prices of Butadiene FD Hamburg were assessed at USD 915/MT during March 2023.
