13 November 2009 22:07 [Source: ICIS news]
HOUSTON (ICIS news)--US butadiene (BD) spot prices were on a downward trend in November, pressured by weakened demand and increased supply, market sources said on Friday.
BD spot prices were assessed at 63-64 cents/lb ($1,389-1,411/tonne, €931-945/tonne) this week, down from 72-74 cents/lb early in the month, according to global chemical market intelligence service ICIS pricing.
The drop follows a flat BD settlement for November at 68 cents/lb, which stymied a surge in May-October, during which contracts rose by more than 170%.
The rollover this month came as BD supply began to loosen in October due to a slowdown in demand and a small increase in production.
US BD production in the third quarter was 772m lb (350,00 tonnes), up by 1.05% compared with 764m lb in the previous three months, according to the latest data from the National Petrochemical & Refiners Association (NPRA).
BD inventories in July-September were at 201m lb, which is up by 67.5% from 120m lb in April-June based on NPRA figures.
Inventories may show additional gains in the fourth quarter, as BD demand for December is also showing signs of softness, according to a producer.
Sentiment among buyers also pointed to supply on the looser side through the end of the year.
“I expect to have firm spot quotes in this range [63-64 cents/lb] for December,” a consumer said.
BD demand also seems to be tapering off in other markets.
Spot prices in Europe this week were at assessed at $1,350-1,430/tonne FOB (free on board) Rotterdam, down from $1,400-1,450/tonne a week before.
BD prices in Asia fell to $1,320-1,370/tonne CFR (cost and freight) northeast Asia, from $1,350-1,390/tonne a week earlier, pressured by ongoing weakness in downstream markets.
BD is a raw material used in the production of a variety of synthetic rubbers and polymer resins as well as a few chemical intermediates.
The largest single market for BD is the production of styrene butadiene rubber (SBR), which is mainly used to make automobile tyres.
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