Butadiene Market Standoff

Business, Economics, Markets, Olefins

By Malini Hariharan

Just days after a recovery in butadiene prices, downstream synthetic rubber producers are once again threatening to cut production as weak demand has pushed them in to a tight corner.

Asian major Korea Kumho Petrochemical is looking at trimming the operating rate at its 210,000 tonnes/year polybutadiene rubber (BR) plant to 85%, and also extending the shutdown of a second plant.

BR producers need to take drastic measures. Butadiene prices rose by $150/tonne last week, while BR prices dropped by $50/tonne. The spread between the two is barely $250/tonne, well below the $600-700/tonne that BR producers need to cover costs, writes Helen Yan on ICIS news.

Any effort to raise BR prices has encountered stiff resistance as an uncertain economic climate keeps demand quite weak. And the correction in crude oil prices is likely to keep buyers on the sidelines this week.

Meanwhile, butadiene supply is expected to remain tight as a result of maintenance shutdowns and outages. Additionally, some crackers in Northeast Asia are running at reduced rates because of poor economics.

This is supporting producers’ efforts to raise prices. But unless BR producers pass on these costs hikes, another price correction seems inevitable.


New Policies Needed To Restore Growth


Politicians seem to be floundering as they seek to restore growth to the Western...

Learn more

Why Should Q2 Be Any Better?


  By John Richardson THE question being asked during the first quarter of t...

Learn more
More posts
BASF’s shocking Q2 results should have been no shock at all

y John Richardson NOBODY should be surprised by the BASF results for Q1 2019 where, on a year-on-yea...

Multiple trade disputes and the risks for the US PE industry

By John Richardson FALLING out with a trading partner as big as China is problematic enough. But the...

China PE overstocking at nearly a million tonnes as demand weakens, competition intensifies

By John Richardson MEASURING petrochemicals and polymer inventory levels in China with any reasonabl...

China petrochemicals recovery on G20 trade war progress will be shortlived

By John Richardson China petrochemical and polymer price spreads over naphtha feedstock costs will r...

President Trump’s Vietnam warning threatens more polyethylene disruptions

Just to stress  that, as always, what follows are my own personal views and not those of ICIS By Jo...

US LLDPE imports and the impact on European petrochemicals

  By John Richardson EUROPEAN linear-low density polyethylene (LLDPE) markets have yet to feel ...

Southeast Asia PE spreads further underline weak demand, but trade talks promise rebound

By John Richardson THE GOOD news today is that the US and China have agreed to resume trade talks. P...

Global polyethylene: Supply is not the problem, it is demand

By John Richardson WHEN people talk about supply it is very often because it is much easier to quant...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more