Europe BD export prices rise by more than $800/tonne in two weeks

17 February 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--Export prices for European butadiene (BD) have surged by over $800/tonne (€608/tonne) in the space of two weeks, driven higher by restricted supply, strong global demand and rising Asian spot prices, market participants said on Friday.

Prices for export tonnes were assessed by ICIS at $2,800–2,900/tonne FOB (free on board) ARA (Amsterdam-Rotterdam-Antwerp) on 3 February, rising to $3,200–3,300/tonne FOB ARA on 10 February, and reaching $3,550–3,725/tonne FOB ARA on Friday.

Asian prices firmed rapidly after the Lunar New Year holidays, with spot prices assessed at $3,900–4,000/tonne CFR (cost and freight) NE (northeast) Asia in the week ended 10 February, up by $450/tonne in just one week.

Asian spot prices then began to retreat amid a spate of production cuts at downstream synthetic rubber plants, with prices assessed at $3,900–3,950/tonne CFR NE Asia on Friday.

In Europe, the BD market is widely described as tight, with all surplus volume being allocated for export.

Sellers said that supply is constrained globally, and they expect to see a substantial increase in US demand as the spring turnaround season there gets underway in the coming weeks.

However, there was little consensus among market participants regarding the sustainability of the bullish Asian price trend.

One trader was confident that the market is strong, saying it does not anticipate a slump in Asian prices, while another said, “I am just waiting to see the whole thing collapse”.

A tender for 2,500 tonnes of BD was awarded by a European producer to a trader this week at a price of $3,726/tonne FOB ARA. The buyer said the tonnes will be shipped to Asia as part of a larger cargo.

Other market participants expressed surprise at the price that was paid for the cargo, and said they do not believe it is representative of the export market.

Domestic spot prices have risen over the past two weeks from €2,075-2,150/tonne FD (free delivered) NWE (northwest Europe) Inland to €2,125-2,350/tonne FD NWE.

($1 = €0.76)

By: Samuel Weatherlake
+44 20 8652 3214

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