A quick recovery for butadiene

China, Markets, Olefins

By Malini Hariharan

Asian butadiene prices are once again on their way up, rising over 20% in the last two weeks.

Prices last week were at $1,900/tonne cfr Northeast Asia, up from a low of $1,500-1,600/tonne cfr Northeast Asia in the week ending 11 November, reports ICIS news. And offers have crossed the $2,000 mark this week with producers confident of pushing through price hikes.

Market players had expected butadiene prices to rebound on the back of cuts in cracker operating rates in the region. The reduction in production was driven by weak markets for ethylene and propylene derivatives.

But affordability is a question as key butadiene derivatives are also performing poorly.

Spot styrene butadiene rubber (SBR) prices in China dropped this week on lack of buying support. Chinese tyre makers are said to be running at 80% as the auto sales have fallen in recent months.

SBR prices are retreating after rising by nearly 18% in the last two weeks.

Acrylonitrile butadiene styrene (ABS) too is under pressure with end-users showing no interst in resuming purchases. Exports of finished goods to the West has fallen and is unlikely to recover give the current economic climate.

So where does this leave butadiene? Buyers are no doubt hoping that the price rise will soon be arrested. But restricted availability could once again well help producers boost prices and profitability of naphtha cracking operations.

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