21 May 2012 22:10 [Source: ICIS news]
HOUSTON (ICIS)--A US butadiene (BD) producer on Monday nominated a 24% reduction for its June contracts, an initiative that comes on the heels of a sharp decline in spot prices in recent weeks.
According to sources, the producer nominated a contract price of $1.10/lb ($2,425/tonne, €1,892/tonne) for June, which is down from its $1.45/lb settlement in May.
A second nomination was also heard on Monday, with another supplier nominating a June price of $1.37/lb, which is down by nearly 12% from its $1.55/lb price in May.
Two other producers are expected to step out with their initiatives in the coming days.
One market source predicted the two remaining initiatives would fall between the two initial reductions, but another source said the producer nominating the contract of $1.37/lb may also revise its price downward.
Most US BD contracts in May settled at $1.45-1.47/lb, dropping on average by 7.50 cents/lb from April.
The drop in May ended a sharp uptrend that began in January and lifted US BD prices by nearly 60%.
The downturn is the result of pressure from stalled demand and softer prices in Europe and Asia.
BD prices in Asia were assessed last week at $2,100-2,250/tonne CFR (cost and freight), down by around 45% from a range of $3,800-4,000/tonne in mid-February.
US BD spot prices were assessed last week at $1.15-1.25/lb, down by 23% four week earlier, while spot prices in Europe have fallen by nearly 30% to $2,000-2,200/tonne FOB (free on board) ARA (Amsterdam, Rotterdam, Antwerp).
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