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 Q3 2020
Supply was tight in Q3 due to the planned and unplanned outages in Asia. The influx of deep-sea cargoes from Europe had also dwindled due to the resurgence in demand in Europe. Disruptions in BD supply in the US due to weather-related issues further curtailed global supply. Demand in Asia exceeded supply as the downstream synthetic rubber plants in Asia increased their operating rates following the reopening of most Asian economies in Q3.
Demand strengthened as economies in Asia reopened after their lockdown measures were eased or lifted following the decline in coronavirus infections in most Asian countries. The downstream synthetic rubber plants in Asia ramped up their operating rates to meet increasing demand for end-products such replacement tyres, footwear or industrial belts. China’s automotive industry, the world’s largest car market, continued to show increased sales and production, underlining strong demand for synthetic rubber.
Supply continued to be heavily cutback to offset the still very much below normal demand levels at the start of Q3. Some unexpected cracker outages also served to reduce any surpluses. Towards the end of Q3, there were signs of improved operating rates driven by improvements in spot export opportunities, particularly given the limitations ex-US due to hurricane disruption.
Demand slowly but surely started to pick up. Inventories down the chain were eventually drawn down and synthetic rubber producers were able to ramp rates up. Supply driven demand in Asia saw a pick-up in BD as well as synthetic rubber exports and sentiment in general was much more positive than in the previous five months.
Supply was largely sufficient to meet contractual obligations as demand remained subdued because of the pandemic. Spot availability was tighter because one of the largest producers, BASF Total, had its cracker down for a large part of the quarter. This halted export activity. BD production was mixed as some crackers had outages but operational units were yielding more BD than in Q2, when significant co-cracking was taking place amid sidelined BD demand.
Demand rose as tyre producers ramped up their operating rates, following widespread closures during Q2 because of the coronavirus pandemic. Replacement-tyre demand was stronger than expected as tyre producers replenished their inventories of after-market tyres. Demand for other end-uses such as nylon and ABS lagged as automakers were slow to ramp up their operations. Demand was strong in Asia, but tighter availability due to some unexpected outages halted US exports to the region.
Whether you are buying or selling, our short-to-long term solutions – from pricing data, breaking news and market analysis, to supply and demand forecasts – will power your decision-making process by bringing clarity through data and ensuring you are able to evaluate the global butadiene market from every angle.
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
Supply and demand: Analysis of domestic and international supply and demand
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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