Updated to mid-November 2009
Asian market review by Helen Yan, ICIS pricing
Asian butadiene spot price rose and fell in Asia in the three month period from mid-August to mid-November. The price surged nearly 20% in one month to peak above $1,700/tonne CFR (cost and freight) NE Asia (northeast Asia) in mid-September before tumbling to $1,400/tonne CFR NE Asia in November.
Waning demand and surplus butadiene supply in China with the start-up of three new butadiene units exerted downward pressure on the butadiene price from mid-September.
China’s Fujian Refining and Petrochemical Co, Liaoning Panjin and Dushanzhi Petrochemical started new butadiene units in mid-September, flooding the market with surplus butadiene.
Chinese demand for butadiene import cargoes fell, pulling spot prices down to $1,400/tonne CFR NE Asia in November from the year high of $1,750/tonne CFR NE Asia in mid-September.
European market review by Nel Weddle, ICIS pricing
European butadiene supply remained tight in August through to October. Cracker cuts and light feed cracking were still restricting output while demand both domestically and for export to the US was strong.
Fourth quarter contract discussions got under way in September and sellers again targeted large hikes in order, they said, to rectify the imbalance between low European prices and those seen globally. The contract settled at €900/tonne FD (free delivered) NWE (northwest Europe), up by €300/tonne from the third quarter.
The September, October and November monthly contract prices were settled at €830/tonne, €1,025/tonne and €960/tonne FD NWE respectively.
Domestic spot prices rose to peak at €1,140/tonne FD NWE in September, but the trend started to reverse in October as demand dropped off in the US. By late October- early November, US product was being offered for sale in Europe. Domestic prices were talked around €900-960/tonne FD by mid-November.
Export prices dropped from $1,500s/tonne FOB (free on board) Rotterdam down $1,300/tonne FOB Rotterdam at the time of writing
US market review by William Lemos, ICIS pricing
US butadiene contracts in November settled flat at 68.00 cents/lb ($1,499/tonne), following a surge between May and October during which butadiene rose by 170%.
The rollover in November came as butadiene supply began to loosen in October on increased production and weaker demand due partly to de-stocking downstream.
Butadiene spot prices were at 63.00-64.00 cents/lb in mid-November, down from around 73.00 cents/lb a month earlier.
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Butadiene
Uses and Outlook
Butadiene is a versatile raw material used in the production of a wide variety of synthetic rubbers and polymer resins as well as a few chemical intermediates.
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The original processes for making butadiene from acetylene by the Adol or Reppe routes is no longer used on economic grounds. Butadiene was also produced from ethanol but this process is now obsolete.
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