According to the Commodity Market Analysis System of Shengyi Society, from October 1st to October 14th, the domestic butadiene market price decreased from 13700 yuan/ton to 13437.5 yuan/ton, with a price drop of 1.92% during the period. This cycle coincides with the National Day holiday, and the overall butadiene market is weak. Before the holiday, the overall trend of the market was relatively weak, and downstream purchasing intentions were more cautious, resulting in an overall decline in prices. After the holiday, the opening of the market was affected by the strengthening of the downstream synthetic rubber market, and spot market prices slightly increased. However, due to insufficient follow-up of downstream demand, the market’s wait-and-see atmosphere gradually rose, and the fundamentals weakened, causing the market to fall back. At the same time, due to the recent loose market supply, it has dragged down the mentality of holders and led to a wide decline in market prices. As of October 14th, the mainstream delivery price of butadiene in Shandong region is between 13300-13400 yuan/ton.
On the cost side, the international oil price trend is rising. As of the 9th, the settlement price of the main contract for WTI crude oil futures in the United States is $73.24 per barrel, and the settlement price of the main contract for Brent crude oil futures is $76.58 per barrel. During China’s National Day holiday, international oil prices have risen significantly. On the one hand, the tense geopolitical situation in the Middle East has had a positive impact on international oil prices. On the other hand, the supply of crude oil remains tight. The OPEC+2.2 million barrels per day production reduction before the end of November will still be effective, and some oil producing countries have stated that they will carry out compensatory production cuts. The supply shortage still exists, and the international crude oil price trend is rising. However, concerns about the global economy and demand outlook still exist in the market, coupled with the end of the US oil peak and the increase in US crude oil inventories suppressing the rise in crude oil prices. Overall, the trend of crude oil prices has risen during the cycle. As of October 11th, the settlement price of the main contract for WTI crude oil futures in the United States was $75.56 per barrel. The settlement price of the main Brent crude oil futures contract is $79.04 per barrel.
Supply side: The listed price of butadiene for various sales companies of Sinopec is currently 13500 yuan/ton. The Northern Huajin 120000 tons/year butadiene plant is scheduled to shut down for maintenance on July 12th and has been restarted since October; The 180000 tons/year butadiene plant of Fujian United was shut down for maintenance on October 10th. The 56000 ton butadiene unit of Qilu Petrochemical was shut down for maintenance on October 9th, and the downstream butadiene rubber unit was shut down simultaneously. Jilin Petrochemical’s 190000 ton plant shut down on August 25th and is expected to restart in late October. Recently, there has been little change in the comprehensive operating rate of the domestic butadiene industry, and the overall supply of butadiene is relatively stable.
Demand side: The downstream rubber market is expected to rebound and consolidate after the holiday. According to the Commodity Market Analysis System of Shengyi Society, as of October 12th, the price of styrene butadiene rubber in the East China market was 17066 yuan/ton, an increase of 2.71% from 16616 yuan/ton on October 1st, and a decrease of 0.19% from the high point of 17100 yuan/ton during the cycle. The price of raw material butadiene has fallen from a high level, while the price of styrene has surged and fallen. The cost of styrene butadiene rubber still has some support. Downstream all steel tire starts low level operation; The overall production of styrene butadiene rubber remains low. The supply price of styrene butadiene rubber has been raised after the holiday, and as of October 12th, the mainstream market price of 1502 styrene butadiene rubber in Fushun, Jihua, Yangzi, and Qilu in East China is around 16900~1720 yuan/ton.
On Friday (October 11th), the closing price of butadiene in foreign markets was partially lowered: among them, the FOB price in South Korea was reported at 1525-1535 US dollars/ton; China CFR reports $1565-1575 per ton; European butadiene FOB Rotterdam closed at $1135-1145/ton; FD Northwest Europe closed at 1100-1110 euros/ton.
Market forecast: Due to the increase in supply in the near future, the overall atmosphere of the spot market is weak. In terms of demand, it has been heard that there are plans to restart some downstream rubber equipment recently, which may increase the demand for raw materials. The demand support is still acceptable. However, overall, the market atmosphere is still relatively weak due to the impact of loose supply, and it is expected that the market will maintain a stable to weak operation in the short term.
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