US May BD contracts settle at 1 cent/lb increases, rollover

HOUSTON (ICIS)–US butadiene (BD) contracts for May have fully settled at an increase of 1 cent/lb for three producers and a rollover for the remaining producer, sources said on Tuesday.

The rollover would leave May contracts for the one producer at its April pricing of 27 cents/lb ($595/tonne).

The separate 1 cent/lb increases would put May contracts for two producers at 30 cents/lb and one producer at 36 cents/lb.

As a result, the ICIS weighted average for May is 29.94 cents/lb, up from 29.32 cents/lb in April.

The overall uptick was in line with price movements in the global market, with Asia spot prices rising amid planned and unplanned cracker outages, and with European May contracts settling at increases on tighter supply.

“We always told [producers], we don’t care what the BD price as long as you’re competitive with imports,” a buyer had said.

In the domestic market, supply had been long because of a force majeure and supply allocation in the derivatives market, but the downstream plants resumed production late last week.

Additionally, a cargo of 7,000 tonnes of BD was fixed for a late April or early May loading to Asia, considerably tightening domestic supply.

Meanwhile, overall demand remained steady, although buying interest in the spot market had picked up.

“I got few spot inquiries here and there for domestic, and export is inquiring,” a market source said.

Nevertheless, one producer said it had settled its May contracts at a rollover because it saw no compelling reason in the US market to either raise or lower prices.

Another market source said that there was “no real price support globally for higher pricing” because demand was not particularly strong.

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

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