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The Asian butadiene market has inched slightly higher and held relatively stable over past four trading days at $1090/ton FOB South Korea. However, the regional players are not optimistic about the near-term outlook on the uncertain macro environment.   

Butadiene cost based on FOB South Korea has lost approximately 38 percent in value or $660/ton compared to late August 2018, according to CommoPlast data.

“Customers show little interest to build stock at the moment regardless of the USA and China’s effort to decelerate the trade tension. Demand from the synthetic rubber sector might not improve so soon considering the development in China automobile sector,” an industry source said.

In fact, Reuters recently reported a 13.9 percent plunge in Chinese automobile sales in November compared to last year to 2.55 million vehicles. This is the fifth consecutive month of declining, which exert a negative impact on the demand for tires. China is the largest automotive market in the world. 

In the meantime, home appliance sector might continue to face cloudy outlook in the coming months that the trade talks between China and the USA have not yielded any concrete result. After the 90 days truce that the two countries agreed on 1 December, the US government might lift tariffs on Chinese imports to 25 percent.

“We are on the wait and see position at the moment. Hopefully, the pre-Lunar New Year replenishment will be strong,” another market source added.