25 March 2013 15:15 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--The US butadiene (BD) contract price for April has settled at rollover, market sources said on Monday.
The three producers who account for about 85% of the market have agreed on 84 cents/lb ($1,852/tonne, €1,426/tonne), while a fourth producer has settled at 87 cents/lb.
Speaking on the sidelines of the International Petrochemical Conference (IPC), market sources said that given relatively soft fundamentals in the global economy, weak auto sales in Europe, and growing uncertainty about the strength of the Asian economy, there were solid arguments to be made in favor of bringing the contract price down 2-3 cents/lb.
But at the end of the day, both buyers and sellers agreed that they did not know enough about what is perceived to be short-term market softness in Asia following the Lunar New Year, so most agreed to keep the price unchanged.
“Even if I’m paying an extra two cents a pound this month, I’m OK with rollover,” said one market source.
“I was quite unhappy with the rollover,” said another market source. “I don’t think you should try and force stability into a market that’s naturally volatile.”
From December 2012 to February 2013, the US BD contract price had been 76 cents/lbs. In March, it went up to 84 cents/lb.
Some market participants had been predicting that BD would slowly rise during 2013 and go back to above $1/lb. But market sources speaking at the IPC said that no one expects BD to rise that high in 2013.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.
($1 = €0.77)
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