10 October 2013 07:40 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Asia’s butadiene market is likely to remain buoyant for the rest of October, with Chinese players joining in the regional buying frenzy for prompt material this week, while producers have mostly ran out of cargoes to sell, industry sources said on Thursday.
The key Chinese market re-opened on 8 October after a week-long shutdown to celebrate China’s National Day.
Traders have raised their import offers to at least $1,700/tonne (€1,258/tonne) CFR (cost and freight) northeast (NE) Asia for prompt October shipments, following a price hike by Chinese petrochemical major Sinopec this week.
On 4 October, spot BD prices were assessed at $1,550-1,600/tonne CFR NE Asia, up by an average of $90/tonne from the previous week, according to ICIS data. Prices surged by about 24% since early September.
Sinopec increased its BD prices for contract customers by yuan (CNY) 500/tonne to CNY10,800/tonne on 9 October, signalling continued strength in demand for BD, market sources said.
China’s domestic BD prices were assessed at CNY12,800-13,000/tonne ($2,092-2,124/tonne) DEL (delivered) on 9 Oct, up by CNY3,500/tonne from 2 September, according to Chemease, an ICIS service in China.
“There are some enquiries for November shipments but most of the buyers need prompt October shipments and we have sold out for October ,” a South Korean BD producer said.
Delays in the start-up of new BD units in China, Indonesia and Taiwan have crimped supply, spurring higher offers from traders with stocks in hand, market sources said.
Sichuan Petrochemical may further delay the start-up of its new 150,000 tonne/year BD unit in China to November, industry sources said. The plant was originally due to come on line in July-August.
“Currently there are few cargoes for October but buyers still want more October cargoes,” a downstream synthetic rubber maker said.
Supply may also remain tight as some BD plants are running at reduced rates.
Qixiang Tengda Chemical has been running its two butadiene (BD) units with a combined capacity of 150,000 tonnes/year in China’s Shandong province at 25% of capacity since mid-May.
($1 = €0.74 / $1 = CNY6.12)
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