China BD Market Stays High During Spring Festival
During the Spring Festival holiday, the market price of butadiene trended at highs, and low-priced resources were hardly seen in the market. Asian butadiene market kept firm. Spot butadiene resources were sparse both at home and abroad. The supply strongly bolstered the butadiene market. On February 18, the ex-works price at some producers was RMB 10,000/mt, with passable sales. The delivered price of butadiene in the Shandong market was RMB 10,250-10,300/mt, down RMB 25/mt from February 9. The delivered price of butadiene in the Jiangsu-Zhejiang market was RMB 10,150-10,300/mt, up RMB 25/mt from February 9. Players mainly stayed on the sidelines.
The robust Asian market underpinned the trading atmosphere in China.
Recently, the Asian butadiene market remained firm, and it was hard to seek low-priced resources. The operating rate of crackers was not high, and limited deep-sea cargoes were replenished to the Asian market. Thus, available spot resources were sparse in the Asian market, bolstering the price to some extent. Ahead of the holiday, some Southeast Asia-origin resources were concluded at formula price, with a relatively high price. The export dealing price of Chinese-made resources was close to $1,200/mt (FOB China), and some offers even reached $1,250/mt (FOB China). The Asian butadiene market also drove up China’s domestic market.
Currently, the spot supply pressure is not high in the market.
At present, most producers with available resources don’t face sales pressure. In February, merchantable butadiene may be sparse, in the wake of exports of some resources. With the butadiene price rising to a high level, some producers are more active in selling goods, especially those with matched downstream units. Yet, in the short run, the supply may continue to bolster the butadiene price amid low inventory pressure. Thus, the market price of butadiene may remain high.
Limited demand may drag down the butadiene price.
At present, downstream industries including SBR, PBR, ABS and SBS face profit losses. High cost pressure on downstream users curbs the increase in butadiene price. After the Spring Festival holiday, it is head that some PBR units have been shut down, weighing the trading atmosphere. Yet, as seen from the current market, the feedstock inventory at downstream users is not high. Thus, the rigid demand may prop up the butadiene market, in the wake of resuming production from downstream users. Players should pay close attention to the production resumption status of downstream users and price changes of downstream products.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
