AFPM ’15: US April BD contracts settle at rollover, up 1 cent/lb

HOUSTON (ICIS)–US butadiene (BD) contracts for April have settled with three producers rolling over prices from March and the fourth producer increasing prices by 1 cent/lb, market sources said on Tuesday.

The separate rollover settlements put April contracts for one producer at 27 cents/lb ($595/tonne) and two producers at 29 cents/lb.

The fourth producer has confirmed that it is implementing the 1 cent/lb increase that it had nominated, which would put its April contracts at 35 cents/lb, according to market sources attending this year’s American Fuel & Petrochemical Manufacturers (AFPM) International Petrochemical Conference (IPC).

As a result, the ICIS weighted contract average for April is 29.32 cents/lb, slightly up from 29.14 cents/lb in March.

Previously, two producers had separately nominated a rollover from their March pricing of 27 cents/lb and 29 cents/lb.

The other two producers had separately nominated an increase of 1 cent/lb, which would put their April contracts at 30 cents/lb and 35 cents/lb.

Although, one of those producers revised its April contract nomination to a rollover, which would put its price at 29 cents/lb, market sources were waiting to see if the fourth producer would renominate its April pricing as well.

Despite rising BD prices in Europe and Asia, many buyers felt that the US market does not need an increase right now, considering demand remains on the steady-but-soft side and supply continues to be viewed as ample.

Sources at the IPC said that a rollover in pricing from all four producers would indicate that the market still had pockets of length, while an increase from the fourth producer would indicate that the market has become more balanced.

One buyer said on Tuesday that the results of the April contract settlement process makes sense because aggregated fees ‒ or premiums based on individual contract terms ‒ would put final contract prices at around 35 cents/lb.

Major US BD producers include ExxonMobil, LyondellBasell, Shell Chemical and TPC Group.

Sponsored by the AFPM, the IPC takes places from 29-31 March in San Antonio, Texas.

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