23 February 2010 22:03 [Source: ICIS news]
HOUSTON (ICIS news)--A US butadiene (BD) producer on Tuesday nominated an increase of 6 cents/lb ($132/tonne or €96/tonne) for March, undercutting three other initiatives and likely putting contracts at 76 cents/lb next month.
The monthly US BD contract usually settles at the lowest price nominated by the four main producers, which proposed increases of 8, 10, 7 and 6 cents/lb for March.
BD contracts in February settled at 70 cents/lb, up by 7 cents/lb from January, according to global chemical market intelligence service ICIS pricing.
The uptrend in the US BD market stems from tight supply and firm demand.
Market participants said BD consumption has picked up since the start of the year, citing strength in the tyre sector.
A rubber producer attributed that in part to restocking, saying tyre makers were running on very low inventories at the end of 2009.
In addition, tyre manufactures also expected their raw material costs to rise, the source said, linking that that to additional demand for BD right now.
On the production side, market sources said BD supply began to tighten at the end of 2009, citing the idling of a facility in Texas and recent sales controls in the industry.
According to sources, two US producers are on allocation at 75% and 65%. A third producer is performing maintenance at one of its plant, further limiting supply.
“The state of the market is firmer and an increase of this magnitude is reasonable,” a buyer said, citing spot-price indications in the US Gulf.
US spot BD activity has been thin due to tight supply, but prices were hovering in the high 80 cents/lb, sources said.
US BD producers include ExxonMobil, INEOS, LyondellBasell, Shell and TPC Group. Buyers include Invista, International Specialty Products (ISP), Lanxess, Michelin and Negromex.For more on butadiene, visit ICIS chemical intelligence
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections