US butadiene September contract prices fall 7, 6 cents/lb

31 August 2012 18:04  [Source: ICIS news]

HOUSTON (ICIS)--US butadiene (BD) contracts for September settled down because of decreased demand, market sources said on Friday, with three producers settling at 83 cents/lb ($1,830/tonne, €1,464/tonne) and another at 90 cents/lb.

The three producers, which account for about 82% of the US capacity, settled at 83 cents/lb, down from their August contract prices of 90. A fourth producer contract fell by 6 cents/lb to hit 90 cents/lb.

US BD contracts normally settle at the end of the month for the following month.

US demand for BD has been diminishing for several months, which has some market participants concerned. Market participants – producers and buyers – said they would rather see an active market than one stymied by weak demand and falling prices.

The European BD monthly contract price (MCP) for September settled down by €25/tonne ($31/tonne) from August to €1,550/tonne ($1,938/tonne). The decrease was attributed to weakness in the Asian and US BD market, although some producers voiced concern that the higher price of naphtha gave them reason to seek an increase.

In the end, the European producers that had aired their concerns succumbed to the lower contract price as that is the method by which the market worked.

The Asian market has seen spot prices fall by $50-100/tonne because of poor performance in downstream synthetic rubber sectors, and the expected arrival of a large number of European parcels in September and October.

BD producers in North America include ExxonMobil, LyondellBasell, Shell and TPC Group. Buyers include Ashland, INVISTA, LANXESS, Michelin and Negromex.

($1 = €0.80)

By: Wesley Busch
+1 713 525 2653

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