China N-Butane Market Remained Largely Stable in Q1, 2019

China N-Butane Market Remained Largely Stable in Q1, 2019

In Q1, 2019, China’s n-butane prices fluctuated within in a narrow range in response to the relatively balanced supply-demand fundamentals. According to SCI’s statistics, China’s n-butane prices hovered at RMB 3,800-4,100/mt, and the price spread was relatively small. Moreover, the n-butane prices averaged RMB 3,943/mt in Q1, 2019, down RMB 587/mt or 12.96% Q-O-Q.

On the one hand, the civil-use gas price spread was small, and the dealing prices of civil-use gas hovered at RMB 3,780-4,200/mt. On the other hand, the demand for civil-use gas performed well in the winter season, and the demand from the deep-processing enterprises also remained stable due to the moderate operating rate. Moreover, the daily n-butane output was relatively stable, exerting limited impacts on the n-butane market prices.

The overall operating rate of MA unit hovered at highs, mainly due to the fairish profit. According to SCI’s statistics, the monthly average of MA profit in Q1, 2019 was RMB 878.56/mt, RMB 1,360.83/mt and RMB 927.58/mt respectively, and the monthly average operating rate was 75.6%, 63.7% and 77.65%.

In Q2, 2019, the operating rate of MA units will remain high, supported by the favorable profit. Accordingly, the demand for n-butane from the MA market will be moderate. Furthermore, with the temperature getting higher, the demand for n-butane from the civil-use gas market will gradually weaken. In the short term, SCI reckons that the n-butane supply will remain largely stable. In the long run, with the two CDUs and the alkane dehydrogenation unit at Dalian Hengli Petrochemical (Phase II) put into operation, the n-butane supply will obviously rise. On the whole, SCI reckons that the n-butane prices will be stable-to-rising in Q2, 2019 and may greatly decline in the long term.

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