09 August 2012 03:33 [Source: ICIS news]
By MK Liu
SINGAPORE (ICIS)--China's butadiene (BD) spot prices may fall further as demand remains weak while supply is being augmented by imports, industry sources said on Thursday.
Domestic BD prices were assessed at yuan (CNY) 17,800-18,000/tonne ($2,798-2,830/tonne) on 8 August, down by 12% or CNY2,200/tonne from 20 July, according to Chemease, an ICIS service in ?xml:namespace>
“BD prices may fall to around CNY15,000/tonne if there is more-than-sufficient supply in [the] domestic market and no revival in fundamental demand,” a major BD producer said.
Imported cargoes are currently making up for the current shortfall in domestic production because of scheduled turnarounds at BD facilities in
With more BD shipments coming in amid continued weakness in demand from downstream synthetic rubber makers, BD prices have been on a continuous downtrend since mid-July.
“BD imports volumes may increase to 40,000 tonne for July and August to fill [the supply] gap in the domestic market,” a market player said.
Between July and August, an estimated 34,000-38,000 tonnes will be shaved from
The low run rate will lead to production losses of about 5,000 tonnes of BD, the source said.
Liaoning Huajin Tongda Chemical, meanwhile, has shut down its 100,000 tonne/year BD unit at
"We have to purchase imported cargoes to keep our plants running at a stable operating rate,” a downstream synthetic rubber producer said.
BD is a raw material for synthetic rubbers, which go into the production of tyres for the automotive industry.
But overall BD demand from the downstream synthetic rubber sector is still weak as some facilities are also either shut or due to be taken off line for maintenance.
Tianjin Lugang Petroleum Rubber also has a scheduled maintenance at its 100,000 tonne/year SBR plant starting 10 August, market sources said. The plant shutdown will last 50 days, they said.
($1 = CNY6.36)
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