Price and market trends: US Dec BD settles down 7 cents/lb after mixed nominations

07 December 2012 10:31  [Source: ICB]

Initial December contract price nomination came from a producer, who proposed a rollover at 90 cents/lb

US butadiene (BD) December contracts all settled at a reduction of 7 cents/lb ($154/tonne, €119/tonne), sources said, after initial nominations at several different rates.

The decline will bring December BD contracts to 76 cents/lb for customers of the three producers who account for 82% of US BD production capacity. For customers of the fourth producer, the will bring contract prices to 83 cents/lb.

This is the first time contract prices have changed since the September settlement, when the three producers were at 83 cents/lb and the fourth at 90 cents/lb.

The September price was down from the August contract price of 90 cents/lb, which had rolled over from July. The June price was 107 cents/lb. The fourth producer had an August price of 96 cents/lb, and a June price of 115 cents/lb.

The BD contract price in the US peaked this year at 152-155 cents/lb for the April contract price. That month was unique in that there was a split settlement among the three producers. The fourth producer settled at 162 cents/lb.

Several buyers believed the November contract price would move down. When the November contract rolled over, buyers speculated that the US would be inundated with imports if the December contract rolled over and market conditions failed to improve.

By: Wesley Busch
+1 713 525 2653

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