Two US BD producers nominate rollovers for September

24 August 2011 23:47  [Source: ICIS news]

HOUSTON (ICIS)--Most US butadiene (BD) contracts are expected to remain steady in September, market sources said on Wednesday, adding that two producers have proposed rollovers for next month.

BD settled in August at $1.75/lb ($3,858/tonne, €2,662/tonne) for most of the US market, while some contracts settled at $1.86/lb because one of the main US producers did not match the price of the other suppliers.

The same producer, which owns around 15% of US BD capacity, nominated a decrease of 6 cents/lb for September, an initiative that would put its contracts at $1.80/lb next month.

One final US producer is expected to unveil its nomination by the end of the week.

The proposed rollovers for September would keep US contracts in line with spot prices, which have weakened in August because of growing softness in other regions.

BD spot prices in northeast Asia and Taiwan fell by 2% last week to $3,700–3,800/tonne CFR (cost and freight), while prices in southeast Asia were pegged at $3,800–3,850/tonne, down by $100/tonne from a week earlier.

BD demand in Asia is slowing as concerns about the global economy have weighed on buyer interest and prompted synthetic rubber manufacturers to reduce operating rates.

In Europe, Amsterdam-Rotterdam-Antwerp (ARA) prices were assessed at $3,550–3,650/tonne FOB (free on board), down by $50/tonne from a week earlier. Spot market activity in Europe remains thin as the majority of buyers are fully covered under contract.

The monthly BD contract in Europe for September began to settle on Wednesday at €2,400/tonne ($3,478/tonne) FD (free delivered) NWE (northwest Europe), down by €125/tonne from August.

Major US BD producers include ExxonMobil, LyondellBasell, Shell and TPC Group. Buyers include INVISTA, International Specialty Products (ISP), LANXESS, Michelin and Negromex.

($1 = €0.69)

For more on BD visit ICIS chemical intelligence

By: William Lemos
+1 713 525 2653

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