22 June 2010 05:47 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS news)--Prices of butadiene (BD) in Asia are likely to fall further in July due to worries over weak demand and a surplus of the material, which spurred Chinese producers to ship more BD abroad, traders said on Tuesday.
Spot prices have tumbled $70-80/tonne (€57-65/tonne) last week to $1,920-1,950/tonne CFR (cost and freight) northeast Asia following the start up of China’s Zhenhai Refining and Chemical Co’s (ZRCC’s) new 1m tonne/year naphtha cracker in Ningbo on 12 June. (Please see graph below)
Production of on-spec material from ZRCC’s new 165,000 tonne/year BD extraction unit also added to the oversupply situation in China, sources said.
More than 5,000 tonnes of BD from ?xml:namespace>
“We hear that spot offers for Chinese BD at around or below $1,900/tonne FOB (free on board)
Further exerting downward pressure on the BD price is the weak downstream Chinese synthetic rubber market, which has seen domestic prices of non-oil grade 1502 styrene butadiene rubber (SBR) plunging by yuan (CNY) 3,000/tonne ($441/tonne) since mid-April to CNY 15,000-15,200/tonne ex-warehouse (EXWH).
“Chinese demand for BD is weak as several downstream synthetic rubber makers in
In the international market, BD spot prices have fallen more than $200/tonne since mid-May as supply outstrips demand following the recent start-up of Shell’s new 155,000 tonne/year BD extraction unit in
However, some market players said that the BD price downtrend would most likely be tempered by production cutbacks at Asian naphtha crackers and rising demand in the
“BD producers will start to implement production cuts soon to stop the BD price from falling sharply,” a trader said.
Apart from production cutbacks, major olefins producer Yeochun Naphtha Cracking Centre (YNCC) in South Korea has also chosen to export their product to the US.
“BD prices are going up in the
($1 = €0.81 / $1= CNY6.81)
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