Asian butadiene prices plunged on improved supply condition

The Asian butadiene market has been steadily going down since early March this year after hitting multi-years high level on healthy demand and limited availability. Compared to March, butadiene based on FOB Korean term has fallen about $1700/ton, to settle at $1300/ton on Thursday. 

The stiff reduction over the past six weeks is mainly attributed to the fact that supply is improving visibly while demand continues to weaken. Industry participant anticipated further reduction in the near term amid persistent sluggish buying interest in China. “We think butadiene price might breach below the $1000/ton threshold within this month. Import arrival to China is very high and market need time to digest the inventories.”

At the meantime, buyers in the downstream ABS market have mostly retreated to the sideline, waiting for larger discounts to emerge as a result of spiral upstream costs. This could put additional pressure on the butadiene market with a trader said, “Butadiene suppliers might attempt to divert their cargoes to other markets, however, the opportunity window is rather narrow, especially at the current shipping costs.”