Tariff Easing and Unit Shutdown Boost BD Price in Mid-May
Introduction: On May 12, Beijing Time, the Joint Statement on China-U.S. Economic and Trade Meeting in Geneva was released, announcing mutual tariff reductions by both sides. The trading atmosphere improved, so the butadiene price increased and price fluctuations concluded. Meanwhile, in China, some butadiene units underwent unplanned maintenance, propping up the butadiene market atmosphere. From May 12 to May 16, the butadiene price rose by nearly RMB 1000 in two working days. In the short term, the butadiene price may continue to rally.
In April, affected by the mutual imposition of tariffs by China and the U.S., the market atmosphere for commodities was bearish. From the perspective of butadiene fundamentals, the supply was sufficient, but the demand was insufficient, resulting in the decline of the butadiene price. In H2 April, as the butadiene price gradually dropped, some downstream enterprises purchased to meet rigid demand. Coupled with the restart of some downstream units, the demand supported the butadiene price to some extent. Therefore, the butadiene market price stopped falling and started moving upward. In H1 May, the butadiene market kept moving sideways. New butadiene units ran normally, but the operating rate of downstream industries rallied. Thus, the gap between supply and demand was limited. However, on May 12, as the Joint Statement on China-U.S. Economic and Trade Meeting in Geneva was released, the butadiene market improved. Besides, some units at the major producers with available resources underwent unplanned maintenance, further boosting the butadiene market atmosphere. During the two days of May 12 and May 13, the butadiene market price gained significantly. According to SCI, by May 13, the butadiene delivered price in the Shandong market was RMB 10,600/mt, up 15% compared with the beginning of May.
Tariff easing improved the market sentiment of commodities.
The Joint Statement on China-U.S. Economic and Trade Meeting in Geneva was officially released at 15:04 Beijing time on May 12. The U.S. announced amendments to Executive Order 14257 issued on April 2, 2025, which had imposed ad valorem tariffs on Chinese goods (including those from the Hong Kong and Macao Special Administrative Regions). The U.S. suspended 24% of the tariffs for an initial 90-day period while maintaining the remaining 10%. It also revoked the tariff increases mandated by Executive Order 14259 (April 8, 2025) and Executive Order 14266 (April 9, 2025) on related goods. China correspondingly adjusted the ad valorem tariffs on U.S. goods outlined in Tax Committee Announcement [2025] No. 4. China similarly suspended 24% of the tariffs for the initial 90-day period while retaining 10%, and canceled the additional tariffs specified in Tax Committee Announcements [2025] No. 5 and No. 6 targeting U.S. goods.
With the easing of tariffs, the commodity market atmosphere improved noticeably. The butadiene price was closely related to the synthetic rubber futures, notably bolstering the spot market atmosphere. At the same time, the reduction in orders for the NBR latex industry, which was due to the high tariffs in April, also began to gradually ease. Since mid-May, partial units at NBR latex enterprises have run normally in succession, and orders of some enterprises have improved somewhat. Enterprises’ enthusiasm for production has grown, propping up the butadiene demand.
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