According to the Commodity Market Analysis System of the Business Society, the domestic butadiene market fell unilaterally in May. From May 1 to 30, the domestic butadiene market price fell from 8851 yuan/ton to 6873 yuan/ton, with a 22.34% drop in the cycle and a 37.15% year-on-year drop in the price.
At the beginning of the month, due to the impact of external market prices and low prices from mainstream domestic suppliers, as Sinopec’s supply prices were lowered twice and some merchants still showed a bearish mentality, the butadiene market situation significantly declined. In mid month, the external market had a relatively abundant supply of goods and the transaction price continued to decline, which significantly dragged down the domestic spot market. At the same time, the main production enterprise Sinopec lowered its quotation by 300 yuan/ton within the week. Some early maintenance enterprises in Northeast China resumed their supply of goods by bidding and entering the market, resulting in abundant supply, causing the butadiene market to continue to decline. In the last ten days of this month, some of the northeast manufacturers’ goods were exported, and the spot resources were supplemented. The price of the external market was lower, while the price of downstream products was lower. The demand was difficult to support the butadiene market, and the market continued to decline.
On the cost side, the international oil market was mixed. In the first ten days of this month, the problem of the US debt ceiling raised investors’ concerns about the economic outlook. In addition, the increase in the number of Americans applying for unemployment benefits put pressure on the oil market. The increase in the US crude oil inventory depressed the international oil market. In late September, the US debt ceiling negotiation was a good rumor, and the oil market was boosted by the unresolved question of whether OPEC+, an oil producing country, would cut production.
In April, the domestic naphtha market fluctuated at a low level, with weak costs and demand. Terminal restructuring and ethylene demand continued to be weak, with limited market trading and light trading volume. The cost side of butadiene is influenced by bearish factors.
On the demand side, the downstream synthetic rubber market is weak and declining, and there are temporary shutdowns of styrene butadiene rubber plants leading to an increase in butadiene surplus. The synchronous decline of upstream and downstream products affects the industrial chain profits, making it difficult to effectively move down, and it is difficult for the butadiene market to find demand support. The demand for butadiene is weak.
In terms of external trading: On May 29th, the closing price of butadiene in Asia remained stable: FOB South Korea was quoted at $775-785 per ton; China CFR report $825-835 per ton. The external market of butadiene in Europe is closed.
In the future, it is predicted that the international crude oil price will fluctuate at a low level, and the cost side will be negative for the butadiene industry chain. With the restart of some units, domestic production may slightly increase in the next cycle. At the same time, imported cargo will arrive at the port, and the market supply side pressure is more obvious. The trend of downstream products is poor, and it is difficult to find obvious support on the demand side. Both supply and demand are weak. Butadiene analysts from Business Society predict that the domestic butadiene market will continue to decline weakly.