27 November 2013 21:18 [Source: ICIS news]
HOUSTON (ICIS)--US December butadiene (BD) contracts rolled over on Wednesday, sources confirmed, tracking weak demand and steady supply.
The rollover puts three producers at 54 cents/lb ($1,190/tonne, €881/tonne) and the fourth producer at 56 cents/lb.
With the December rollover, the weighted average contract price remains steady at 54.36 cents/lb.
Each of the four major producers separately nominated a rollover during the week, arguing that demand was unlikely to improve on lower prices and that supply is balanced to tight.
This is because seasonal factors have limited demand from the rubber and plastics markets as inventories are drawn down ahead of year-end taxes.
Additionally, spot demand has weakened as Asia is well-supplied thanks to material from the US and Europe ordered in November and set for December delivery.
US BD buyers had said a decline in December contracts would have made sense, given that domestic demand did not fuel the November increase and that margins are thin.
However, with supply balanced compared to the soft demand, the leverage for buyers was limited.
Major US BD producers include ExxonMobil, LyondellBasell, Shell Chemical and TPC Group.
($1 = €0.74)
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