US butadiene spot prices climbing on continued tight supply

07 February 2014 17:11  [Source: ICIS news]

US butadiene spot prices climbing on continued tight supplyHOUSTON (ICIS)--US butadiene (BD) spot prices continue to climb on ongoing supply tightness in the US and Europe, sources said on Friday.

The 4 cent/lb ($88/tonne) increase puts US spot BD at 70-75 cents/lb on a CIF (cost, insurance and freight) basis.

One US producer said it made trades for smaller volumes at 75 cents/lb and 76 cents/lb, which would put volumes within the ICIS methodology in the low-70s cents/lb.

A US BD buyer agreed, pegging the range in the low 70s cents/lb to mid 70s cents/lb level.

Sources agreed that tightness in the US and European markets is the main driver. Several bids have been made for European material, but little is available.

Buyers cautioned that demand is not driving prices higher, but that BD prices are still low enough to allow for decent margins for downstream products.

“We nowhere near the level where the rubber guys have to slow down,” a BD buyer said. “There’s still money there.”

Spot BD prices are also receiving support from feedstock natural gas liquid (NGL) costs, which have come down slightly but remain strong because of chilly winter weather across much of the US.

By: John Dietrich

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