According to the Commodity Market Analysis System of Shengyi Society, from January 10th to January 17th, the domestic butadiene market price increased from 11925 yuan/ton to 12462.5 yuan/ton, with a price increase of 4.51% during the cycle. This week, the butadiene market continued to rise. At the beginning of the week, affected by the rise in crude oil prices, holders had a strong mentality of supporting prices, and spot market prices rose significantly. Sinopec raised the ex factory price to 12500 yuan/ton, with a price increase of 500 yuan/ton. But as prices continue to rise, downstream high-level receiving capacity gradually declines. As the Spring Festival approaches, some pre holiday purchasing demand has been released downstream, driving an improvement in the atmosphere of the spot market. As of January 17th, the delivery price in Shandong region is between 12700-12900 yuan/ton.
Cost aspect: During this cycle, crude oil prices have risen significantly. On the one hand, the OPEC+production reduction agreement has been extended until the end of the first quarter, and some oil producing countries still have compensatory production cuts. The United States has increased sanctions on Russia, and there are strong concerns about supply shortages. The supply side of crude oil is supportive, and crude oil market prices have risen significantly. On the other hand, the instability of the situation in the Middle East still exists, and the arrival of winter cold waves in Europe and America is expected to further boost fuel demand, which is good news for the international oil market. Overall, the rate of change in crude oil during the cycle is continuously expanding in a positive direction. As of January 16th, the settlement price of the main contract for WTI crude oil futures in the United States was $78.68 per barrel. The settlement price of the main Brent crude oil futures contract is $81.29 per barrel.
Supply side: Sinopec’s various sales companies have raised the listed price of butadiene by 500 yuan/ton and implemented a price of 12500 yuan/ton. The 120000 tons/year butadiene plant of North Huajin has been restarted in October; Fujian United’s 180000 tons/year butadiene plant was shut down for maintenance on October 10th; Jilin Petrochemical’s 190000 ton plant shut down on August 25th and restarted on October 16th. Recently, the comprehensive operating rate of the domestic butadiene industry has not changed much, and the overall supply is relatively stable.
On the demand side: According to the commodity market analysis system of Shengyi Society, the overall market for styrene butadiene and butadiene rubber has strengthened this cycle, especially for butadiene rubber, which has seen a significant increase. Currently, low-priced sources of goods are difficult to find in the spot market, and the market atmosphere is cautious. Downstream terminal demand maintains rigid procurement, and the market atmosphere is strong. As of January 17th, the mainstream market price for BR9000 butadiene rubber in East China is around 14700 yuan/ton.
Market forecast: From a cost perspective, the recent strengthening of the crude oil market will drive a stronger atmosphere in the spot market. From a supply perspective, the butadiene market has been relatively stable in recent times, with high raw material prices on the demand side and a slight decline in downstream purchasing intentions. Currently, the demand for essential supplies is being replenished, and the market demand performance is relatively stable. Overall, the performance of the butadiene market is still relatively strong, lacking downstream support. It is expected that there will be limited room for further growth in the future, and the overall trend will remain high consolidation.
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