In 2021, the domestic butadiene market experienced three complete “first decline and then rise” and a long-term sharp decline, and the overall decline ended. Prices can be described as high “stimulus” and falling “outrageous”. The overall market is heavily affected by supply and demand. At the same time, external factors also play a considerable role. According to the price monitored by business society, the average price of domestic butadiene producers fell from 7715 yuan / ton on January 1 to 4451 yuan / ton on December 31, with an overall price decrease of 42.57%. The highest price level appeared at the beginning of the third quarter, which was 11482 yuan / ton on July 20, and the lowest point appeared at 4451 yuan / ton on December 31 at the end of the year, with the maximum amplitude of 61.23% in the whole year.
In the first quarter of 2021, the butadiene market rebounded after the first decline, and the price increase was small, but the overall fluctuation was obvious. It increased from 7751 yuan / ton on January 1 to 7860 yuan / ton on March 31, with an overall increase of 1.40%, and the maximum amplitude in the quarter was 39.07%.
In January, due to the relatively abundant supply of goods in the domestic market and the temporary shutdown of rubber devices in East China, the price support at the supply side was relatively weak, and the price negotiation range continued to move down. With the gradual decline of prices and the approaching Spring Festival holiday, some downstream bargain hunting have been replenished. Under the relatively low price of butadiene, manufacturers’ enthusiasm for taking goods has increased. At the same time, domestic butadiene units have entered the maintenance state since March of the year, and the maintenance expectation has also boosted the mentality of the industry. During the Spring Festival holiday, the overall commencement of downstream industries was significantly higher than that in the same period last year, and the demand side also had strong support for prices. After the festival, due to the continuous rise in the prices of related products, the driving force on the price of butadiene was relatively obvious, and the overall market price remained relatively high in March. However, since late March, with the unexpected shutdown of rubber plants in South China and the export of some Sinopec goods, the spot circulation in the market has increased, the supply side’s support for the price has weakened significantly, and the price has turned downward.
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Butadiene rebounded after the second price drop in the second and third quarters of 2021, but the price fluctuated greatly this time. The overall price decreased narrowly but rebounded sharply. According to the monitoring price of business society, the average price of domestic butadiene manufacturers increased from 8441 yuan / ton on March 20 to 11312 yuan / ton on July 30, with an obvious increase and a long rise time, with an overall increase of 34.01% and a maximum amplitude of 76.44%.
After the slight rise in the domestic butadiene market in April, the shock weakened, and the overall negotiation atmosphere in the market was slightly general. Mainly due to the unplanned shutdown of some units and the shutdown of some oxidation dehydrogenation units under the cost pressure in April, the spot circulation in the market decreased to a certain extent, and the supply side strengthened the price support. In addition, some sources in East China were anxious about the tank capacity during the month, and the selling price was slightly low, which also dragged the market upward, and the shock weakened after the market rose slightly. Since May, some early-stage parking devices have been started one after another, but the actual export products are limited, and the supply side has strengthened its price support. In addition, the month’s internal and external market trend continued to be strong, and some traders in East China had limited intention to lower prices under the support of costs, which also supported the market upward. Since June, most manufacturers in the north have no obvious inventory pressure. Supported by the strong trend of the external market in East China, traders’ enthusiasm for export arbitrage has increased, and the supply of goods gives priority to export.
In late July, although the external price was strong, due to the typhoon, the shipment of some domestic export sources was delayed, and there were many short-term shutdown of downstream devices, resulting in weak market demand. The short-term market expectation is short. With the weakening of downstream inquiry intention, the focus of spot price continues to decline.
From the end of July to the end of the year, the domestic butadiene market fell unilaterally. Although there was a slight recovery in mid October, the overall market remained depressed and sorted out. According to the monitoring data of business society, the average price of domestic butadiene producers fell from 11482 yuan / ton on July 22 to 4451 yuan / ton on December 31, down 61.23%.
In August, with the launch of new production capacity and the planned restart of some units, the supply side of the domestic butadiene market was widened to a certain extent. Some northeast enterprises recently resumed competitive sales, and the social supply of goods increased significantly. In addition, the start-up of synthetic rubber industry has decreased and the cost side is under pressure, which affects the supply and demand fundamentals of butadiene and is difficult to find a significant positive boost. Although the external price performance was strong, affected by the typhoon, the shipment of some domestic export sources was delayed, and there was no lack of short-term shutdown of downstream devices, and the market demand performance was weak. In September, the domestic butadiene market continued to decline. Fushun Petrochemical and Liaoning Huajin, the major manufacturers in Northeast China who have been overhauled for many days, began to resume supply this month, forming a “heavy blow” to the already depressed market. Near the end of September, the external price fell sharply, and the domestic market fell accordingly. At the end of September, the market atmosphere recovered slightly due to the preparation before the festival.
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At the beginning of October, the butadiene market continued the downturn in September. With the rise of the external market, domestic traders actively speculated, and major production enterprises such as Sinopec raised the ex factory quotation for many times. In October, the butadiene market “hit the bottom and rebounded”, reversing the decline since the end of July 2021 and showing a narrow rise. After a short sharp rise in the market, the butadiene market was like a “flash in the pan”, which was fleeting, and the price ladder fell. Insiders have said that the recent market “can’t understand” and “can’t guess”. Throughout November, the domestic butadiene market fell unilaterally and deeply. Both the external market and the domestic market atmosphere are relatively depressed. Coupled with the restart of some enterprises’ devices, the market supply increases. However, the downstream demand is mainly rigid demand, which is not significantly good in the short term. The trading atmosphere is depressed. Most people in the industry are bearish on the future market, and the butadiene market is not optimistic. In December, the domestic butadiene market fell in the first half of the month, then the decline stopped and entered the consolidation stage. Finally, the decline ended with the reduction of Sinopec’s price. The main reason is the drag of the external market and the sufficient supply of goods in the domestic market, resulting in the continuous decline of prices.
The overall market price focus of butadiene in 2021 has rebounded compared with last year. The annual market price change is mainly caused by the combined action of supply and demand fundamentals and other factors, in which supply and demand fundamentals are the main driving factor affecting the annual price change. During the year, due to the centralized maintenance of some butadiene units and the rapid growth of export volume, the phased spot resources were tight and the price rose significantly. After the price rose to a high point, as the downstream cost was under pressure, it was difficult to continuously follow up the high price of butadiene, some downstream manufacturers reduced their negative production, and the demand side’s support for the price weakened; At the same time, in the second half of the year, some new butadiene production capacity continued to release, the market supply was abundant, the supply side was difficult to support the price, and the price continued to decline. In addition, public health events, extreme weather and other factors also have phased effects on the production, logistics and transportation of butadiene and its downstream devices.
In 2021, the annual new capacity of butadiene in China was about 580000 tons / year. By the end of 2021, the cumulative total capacity had reached 5.45 million tons / year, an increase of 11.9% over 2020. In 2022, the butadiene production capacity is still in the period of rapid expansion, but the downstream adiponitrile and ABS industries have certain incremental expectations in the second and third quarters, and the market may be boosted by better demand, but the market supply pressure is also gradually emerging. Under the supply pressure, the mainstream shock range of butadiene market is relatively low.
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