22 June 2012 22:17 [Source: ICIS news]
HOUSTON (ICIS)--A US butadiene (BD) producer on Friday nominated a 10% drop for its July contracts, confirming market projections calling for a double-digit reduction next month.
The producer nominated a 12 cent/lb ($265/tonne, €212/tonne) reduction for July, cutting its prices to $1.03/lb next month, market sources said.
The same producer settled its contracts at $1.15/lb in June, while the three other US suppliers that participate in the settlement process converged at $1.07/lb.
Nominations from those suppliers will be unveiled next week and will probably put BD in the low 90 cents/lb, market sources predicted.
US BD contracts normally settle at the end of the month for the following month.
The drop in July will be the third in as many months.
US BD prices rose by 58% between January and April after four consecutive monthly increases, but prices fell by 7 cents/lb in May and slumped by 40 cents/lb in June.
The downtrend in the past two months stemmed from weakening demand, while growing concerns about a slowing global economy have dimmed the prospects of a quick rebound.
The drop in July could put US BD prices at their lowest level in nearly 20 months.
The contract last settled in the low 90 cents/lb in January 2011.
BD producers in North America include ExxonMobil, LyondellBasell, Shell and TPC Group. Buyers include Ashland, Invista, LANXESS, Michelin and Negromex.
($1 = €0.80)
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