Q4 China BD Market to Trend Up
After the National Day holiday, prices of most bulk commodities surged quickly. On September 15, Sinopec uplifted the butadiene ex-works price by RMB 600/mt to RMB 7,100/mt, up almost 10%. The capacity of newly added butadiene units is released in succession, while China’s butadiene price warm up gradually.
Thus, how will China’s butadiene market fluctuate in Q4, 2020? Detailed supply and demand analysis is as follows:
In Q4, China’s butadiene supply will remain in an uptrend, as the units shut before have been restarted and newly added butadiene capacity is released. The butadiene units at Jiangsu Sailboat Petrochemical and Nanjing Chengzhi Yongqing Energy Technology have been restarted in mid-October. In late October, the ethylene unit at Wanhua Chemical Group will conduct test run. In November, there will be butadiene products available. The butadiene units at Sinochem Quanzhou Petrochemical and Sinopec Zhongke (Guangdong) Refinery will run normally. Thus, Chinese-made butadiene resources will continue to rally. Compared with Q2, the butadiene supply in Q4 will increase by around 30kt. As seen from imported butadiene resources, offers for imported resources are limited recently and were at high levels. Thus, downstream users show thin appetites for taking goods. In Q4, the overall import volume of butadiene will trend down from Q3. Affected by that, the butadiene inventory at East China port will be at a low level. Overall, the supply increase of Chinese-made butadiene resources in Q4 will be lower than the decrease in import volume due to high import volume in Q2. The butadiene supply will be in the tight balance in Q4.
