In May, the domestic butadiene market first fell and then rose

According to the commodity market analysis system of Shengyishe, the domestic butadiene market in May first fell and then rose. From May 1st to 31st, the domestic butadiene market price fell from 11712 yuan/ton and then rose to 11875 yuan/ton, with a price increase of 1.39% during the cycle, the maximum amplitude of 7.10%, and a year-on-year increase of 78.84%.



In the first half of the month, downstream demand followed up after the holiday, and spot resources were slightly tight, with strong support from supplier prices. In addition, there were many premium transactions from northern bidding sources, which boosted the spot market. But recently, the prices of external markets have fallen, and there have been rumors of low-priced transactions, which has affected the weak mentality of market merchants, resulting in low intention prices for inquiries and a stalemate in short-term supply and demand performance.


In mid month, some production enterprises in certain regions saw an increase in export sales, while merchants had clear expectations for domestic production growth in the later period. The downward trend in the market intensified the cautious attitude of downstream inquiries, resulting in a weak transaction atmosphere and further affecting the downward pressure on supplier prices.


In the latter half of the month, the domestic butadiene market was volatile, with a slight weakening after the market rose. However, as the supplier’s supply of goods is replenished through export, the support from the supply side has weakened. In addition, downstream inquiries are more cautious, and the market transaction atmosphere has slightly weakened.


As the end of the month approaches, production enterprises have repeatedly raised their factory quotations, leading to a strong upward trend in the domestic butadiene market. The wide rise in downstream synthetic rubber has also brought a significant boost to the butadiene market.


On the cost side, international crude oil prices showed a downward trend in May, and there was positive progress in the ceasefire negotiations between Palestine and Israel in the early days. The US Energy Information Agency also lowered its global demand forecast, but Saudi Arabia’s view on the demand outlook has improved. In mid month, the market was concerned about the pressure of high interest rates on the economy and demand, but some economic data improved, and the instability of the geopolitical situation remained, with international oil prices falling first and then rising. In the latter half of the year, the geopolitical situation continued to ease, and market concerns about the economic and demand prospects were difficult to resolve. Coupled with the increase in US commercial crude oil inventories, the overall international oil price continued to decline.


In terms of naphtha: The market for naphtha has bottomed out and rebounded. The gap in terminal demand is concentrated in the direction of local refining and restructuring, with refineries purchasing essential goods and relatively tight supply. The relevant gasoline market has not followed suit, suppressing market sentiment. The naphtha market continues to rise but is hindered, consolidating at high levels. At present, merchants are resisting high priced sources of goods, refineries are actively raising prices, and market activity is decreasing. The cost of butadiene is influenced by favorable factors.


On the supply side, the listed price of butadiene by various sales companies of Sinopec has been raised twice to 12000 yuan/ton. The 30000 ton/year butadiene unit of Liaoyang Petrochemical is operating normally, with 400 tons of goods being sold through bidding for export at a bottom price of 11000 yuan/ton; The transaction price is 11380 yuan/ton.. The supply of butadiene is influenced by favorable factors. The 160000 ton/year butadiene extraction unit of Fushun Petrochemical is operating stably, with a bidding price of 11100 yuan/ton for 180 tons of goods for export; The transaction price is 11300-11400 yuan/ton.

On the demand side, driven by the continuous increase in butadiene prices and the favorable futures market, the synthetic rubber market has shown a broad upward trend, while the enthusiasm for speculation in the spot market has increased. The demand for butadiene is influenced by favorable factors.


In terms of external trading: As of the close on May 30th, the price of Asian butadiene remained stable: FOB South Korea reported $1335-1345 per ton; China CFR News 1365-1375 USD/ton; The external price of butadiene in Europe remains stable: FOB Rotterdam closed at $1145-1155 per ton; FD Northwest Europe closed at 1070-1080 euros/ton.


In the future market, it is expected that some devices will restart, and production may increase in the near future. Although the price of synthetic rubber in the downstream has increased, most downstream profits are inverted, and demand still needs to be followed up. Business Society Butadiene Analyst predicts that the domestic butadiene market will mainly consolidate after the rise.

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