03 January 2012 21:52 [Source: ICIS news]
HOUSTON (ICIS)--US butadiene (BD) contracts for January settled higher, market sources said on Tuesday, adding that the market was split with increases of 7 cents/lb ($154/tonne, €119/tonne) and 12 cents/lb.
The settlement puts around 85% of the US market in January at $1.05/lb.
The remaining accounts settled at $1.12/lb as one of the four US producers that participate in the settlement process refused to match the rest of the market.
The same supplier split the market in December, settling at $1/lb while the other three producers converged to 98 cents/lb.
The increase in January came as BD prices in other regions have shown signs of strengthening since December.
BD contracts in Europe settled at €1,700/tonne for January, rising by €50/tonne from December, while spot prices in Asia surged by 30% last month on improved demand.
The settlement for January ended a four-month downtrend in the US BD market, during which contracts fell by 44% because of weaker demand and ample supply.
Market sources expect firmer support for BD prices in 2012, citing potential new demand from the tyre sector and possible supply constraints as a result of upcoming cracker turnarounds in the US.
US BD producers include ExxonMobil, INEOS, LyondellBasell, Shell and TPC Group.
($1 = €0.77)
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