23 November 2011 18:52 [Source: ICIS news]
HOUSTON (ICIS)--A US butadiene (BD) producer nominated a 10 cent/lb ($220/tonne, €163/tonne) reduction for December, paving the way for the fourth drop in as many months for the US contract, market sources said Wednesday.
The initial nomination is line with projections heard in the market, calling for a reduction of 10-15 cents/lb for next month.
BD contracts in November settled at $1.15/lb, down by 25 cents/lb from October as a result of pressure from ample supply and weakening demand.The outcome of the December settlement will depend on nominations by the three other US suppliers that participate in the settlement process.
The remaining nominations are likely to come out only in the last week of November, as most of the US market will be out for rest of this week because of the Thanksgiving holiday.
The expected reduction in December will extend a downtrend for US BD that began in September and has since pushed contract prices down by 35%.
BD demand is expected to remain soft through the rest of 2011, but a US producer is predicting a shift in market conditions next year amid a more optimistic outlook in the tyre sector.
The supplier also cited planned cracker shutdowns as another factor that will lend support to BD prices in 2012.
As many as seven US crackers are scheduled to go off line in the first half of 2012, according to information in the market.
Most of the shutdowns will happen in the second quarter, when five crackers are scheduled to go off line, sources said.
US BD producers include ExxonMobil, INEOS, LyondellBasell, Shell and TPC Group.
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