Asian styrene monomer and butadiene fall on insufficient demand

The Asian butadiene market has been rolling on the downhill since mid of March, shredding $170/ton in less than three weeks time. This is a result of ample spot supply and weak demand in soft demand in key market China. 

Sources reported that quantities from Singapore, India and other countries are available for bidding, but customers are rather conservative about replenishment amid slow downstream market.

“We hear that nearly 10,000 tons of butadiene for April arrival are unsold until now. The downtrend, therefore, might persist in the coming days. We only can hope the traditional manufacturing season in April would stimulate the demand,” a Chinese source said.

A similar demand situation is observed in the styrene monomer (SM) market, which slid $35/ton from late last week to $1033/ton FOB South Korea on 26 March 2019. However, supply for SM might soon curtail amid the shutdown at Taiwan’s Formosa Chemical and Fibres Corporation from 17 April to 31 May. The unit is able to produce 720,000 tons per annum.

The drop in the upstream butadiene and styrene market is pressuring the downstream ABS market in Southeast Asia. In fact, a couple of producers have stepped back on the price list to reflect the drop in production costs. In fact, Indonesian buyers reported receiving offers for South Korea ABS at $20-30/ton reduction compared to mid of March and buyers are negotiating for further discounts.