Asian butadiene tumbled lower, players watch out for bottom

The butadiene costs based on FOB Korea term has been steadily going down since late February, and hit the lowest level since late June 2016 this week on persistent bloated supply and weak demand.

Compared to the peak during February this year, butadiene based on FOB Korea term has slashed nearly 70% in value, in which many Asian players are hoping that bottom is near. An industry participant said, “Local butadiene inventories in China is being digested, hence pressure on prices might reduce in the near term. However, we would prefer to monitor further development in this market after buyers return from the Dragon Boat Festival to gauge the likely market direction.”

Players in the downstream ABS market are taking a more neutral expectation, as demand in the region remains rather disappointed. Couple of ABS suppliers continues to offer small discount this week to encourage purchasing activities, however their effort yield little result. A Fareast Asian trader added, “We are not very confident bout the near term market outlook since most downstream market including SBR is very slow. Our customers are very cautious at the moment.”