Will Butadiene Market Continue to Perk Up in Jan 2023?
Snapshot: China’s butadiene market remained in an upswing from December 2022. Until early January 2023, the market price of butadiene in China surged to a periodical high level. On January 3, 2023, the daily butadiene market price hiked by 8.4% in a single day, hitting the highest increment within one day. However, the high butadiene price didn’t last for a long time and fell back again.
Almost 2-month drops in China’s butadiene prices ended from December and fluctuated upwards constantly. In December, it was expected that butadiene would be available from new units, but no resources flowed into the market. Thus, the spot butadiene market faced a supply crunch. Among existing units, a 60kt/a butadiene unit at Sinopec Yangzi Petrochemical was shut down unexpectedly, and the actual shutdown time of the butadiene unit at Zhejiang Petroleum & Chemical Phase II was longer than expected. Thus, China’s butadiene supply didn’t ramp up notably from last month. Yet, in terms of demand, some synthetic rubber units shut before were restarted in December. Besides, new downstream units came on stream and ran normally in succession. The demand for butadiene ballooned from November. Rigid demand lent strong support to the butadiene market. Bolstered by that, China’s butadiene market price remained in an uptrend.
From late December 2022, the upward extent of butadiene price enlarged from the early days. The butadiene fundamentals changed slightly. China’s butadiene supply recovered gradually, and the demand didn’t see a notable increment. China’s butadiene price surged, due to low inventory caused by downstream users’ replenishment of spot butadiene amid expected resource availability from new units. Yet, in early January 2023, merchantable spot resources were sparse at northern producers. Limited spot circulation and rigid demand pushed up the dealing price to a high level. However, the duration of the price rising was limited, and the market price of butadiene fell back again. Demand failed to underpin the butadiene price at present.
The price spread between butadiene and downstream products shrank notably.
According to SCI, with the butadiene price hiking from January 2023, the price spread between butadiene and downstream products narrowed rapidly. According to main downstream profitability, downstream users faced dropping profits, and what’s more, SBR and PBR industries were in losses on notable cost pressure. Thus, they showed slim interest in purchasing feedstock. In terms of the synthetic latex industry, the profitability underperformed currently, and most enterprises showed resistance to high-priced feedstock. The butadiene price hardly saw constant rises for a lack of support from the demand.
Late January 2023 will witness the Spring Festival holiday. Some rubber latex and tire enterprises plan to shut down units and take holiday, curbing the overall demand for butadiene. Besides, as seen from the supply, there will be butadiene resources available from new units, so the supply is expected to widen, failing to bolster the butadiene price. It is estimated that the high butadiene price may fall back. In 2023, the supply and demand of butadiene will continue to level up. Against this backdrop, how will China’s butadiene market unfold in 2023? The 2022-2023 China Butadiene Market Annual Report will bring you a full scenario regarding China’s butadiene supply-demand evolution as well as market forecast. Please feel free to contact your account manager if you are interested in any content about China’s butadiene market.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
