ICIS price assessments for butadiene (BD)/crude C4 are widely used by market players in contract and trade deals.
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Updated to Q2 2019
Butadiene (BD) supply was tighter than expected in Asia in the second quarter of 2019 because of disruption in supply in South Korea. A month-long delay in the restart of Hanwha Total’s 120,000 tonne/year BD unit to mid-June, coupled with technical issues at LG Chem’s 160,000 tonne/year BD unit in early June, disrupted supply. Another major BD producer in South Korea, Yeochun NCC (YNCC) also shut its 240,000 tonne/year BD plant for maintenance in the second quarter.
Demand for butadiene in Asia remained soft in the second quarter of 2019 because of the weak downstream synthetic rubber market. Declining vehicles sales in China, the world’s largest automotive market, and the US-China trade war, had dampened sentiment and weighed on demand for synthetic rubber. The uncertain outlook prompted the downstream styrene butadiene rubber and polybutadiene rubber makers, major consumers of BD, to keep lean inventories and run at low rates.
European butadiene (BD) supply was well balanced on the whole in the second quarter. Planned cracker and BD unit outages and some unplanned production issues kept supply constrained but this was sufficiently mitigated by softer than expected demand. Global spot prices fell but Europe was able to avoid most of the price pressure because of the supply restrictions. Export opportunities throughout the quarter were limited only improving in June as Asian spot prices were firmer.
Domestic butadiene demand remained steady to soft. Consumers had contracted for high volume in 2019 over concerns for supply during the spring and autumn scheduled maintenance slates but demand down the chain was under pressure from a poorly performing automotive sector as well as the ongoing uncertainties over the outcome of the US-China tariff dispute. Spot domestic demand was very lacklustre as a result although some turnaround preparations for one major consumer bucked the trend.
US butadiene (BD) supply tightened in Q2 amid planned and unplanned outages. ExxonMobil and BASF Total underwent cracker turnarounds, which limited the availability of feedstock crude C4 (CC4). BASF’s BD unit was off line and LyondellBasell issued a force majeure tied to the fire and subsequent closure of the Intercontinental Terminals Company (ITC). Logistics constraints linked to ITC’s closure impeded truck customers from receiving volumes. None of these supply constraints made any impact on the market.
US BD demand continued to be lacklustre in Q2. The expectation was for a demand uptick that would tighten global BD markets as the maintenance schedule in other regions was heavier than usual this year. That never materialised amid a dim economic outlook and weak projections for the automotive sector. Despite planned and unplanned outages, supply remained sufficient across the regions to offset the softer demand. Prices were flat to lower.
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Key trading prices and activities – Spot, contract and domestic prices. Offers, bids and transactions of butadiene and crude/C4
Price alerts and market updates: Shifts in prices, the latest news, market developments and changes in regulations and demand trends
Plant data: Production and capacity, plant maintenance and shutdowns
Feedstock: Prices and market updates for naphtha
Historical prices: Download and/or chart pricing from as far back as the start of ICIS coverage
Weekly market outlook: Overview and outlook for the overall regional butadiene market, including a brief commentary on the related regional markets
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Regional coverage: Asia-Pacific, China, Europe and the US
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Butadiene is a colourless, non-corrosive liquefied gas with a mild aromatic or gasoline-like odour. It is slightly soluble in water, more soluble in methanol and ethanol, and soluble in most common organic solvents such as acetone, ether, benzene, and cyclohexane. It readily polymerises in the presence of sodium or oxygen.
Butadiene is used to produce synthetic rubbers and polymer resins, as well as a few chemical intermediates. The largest uses are styrene butadiene rubber (SBR) and polybutadiene rubber (BR), mostly used in tyres and automobiles.
The major source of butadiene is as a byproduct in the steam cracking of naphtha and gas oil to make ethylene and propylene. The butadiene is extracted from the C4 cracker stream using extractive distillation.
Other uses include acrylonitrile-butadiene-styrene (ABS) resins, styrene-butadiene latex and block copolymers, nitrile rubber, and adiponitrile (ADN)
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With insights into the economic situation, trade war, future investments and much more, the 7th ICIS US Butadiene and Derivatives Conference will be bringing you the necessary data and analysis to ensure you have all the important information to make those essential business decisions
Join us the 11 December 2019 // New York, USA and make sure you do not miss out on this essential event for the butadiene value chain.