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 Q1 2020
Supply was mixed in Q1. Several crackers in Asia were shut for maintenance, but the availability of deep-sea cargoes from Europe helped to offset the tighter-than-expected supply in Asia during this period.
Demand fell due to the coronavirus outbreak in China and other parts of Asia subsequently. Lockdowns, border closures, port restrictions and travel bans imposed by regional authorities in Asia saw demand slumping in Q1. China, the world’s second largest economy and the world’s biggest automotive market, was shut on 23 January for a week-long Lunar New Year holiday, which was extended over several weeks to contain the outbreak.
Supply remained lengthy in Q1. Some planned and unplanned cracker issues helped to offset soft demand; a couple of derivative production issues added to the general bearish tone. Exports were limited at the start due to price discrepancy but as domestic demand got impacted by the coronavirus pandemic, producers had no choice but to export to balance systems.
Demand was slow to pick up. Asia was essentially on virus lockdown which made European derivative demand unclear but offtake was at least in line with most producer expectations. This worsened mid-quarter as the virus spread through Europe and the US, impacting heavily on the automotive sector with downstream plant closures widespread, leaving BD derivatives producers reducing offtakes. Asia began to reopen so exports were viable albeit at very low prices, reminiscent of 2008-2009.
Supply remained snug in Q1 with TPC Group’s Port Neches, Texas site still shut down. The issue has been the loss of that site’s logistics rather than production. A key pipeline is connected to four major consumers representing 60% of US consumption by nameplate capacity, according to the ICIS Supply and Demand database. Import interest, which had been nearly non-existent in late 2019, increased in Q1. Concerns eased at the end of Q1 because of widespread automaker and tyre production closures stemming from coronavirus.
Demand outpaced supply early in Q1 because of continued logistics constraints stemming from the closure of TPC Group’s Port Neches site. Buyers turned to imports to fill shortfalls. Constraints eased in March when the global spread of coronavirus stalled demand from the automotive sector. The Big Three US automakers shut their production lines for at least three weeks, and tyre producers widely followed suit. Goodyear, the largest domestic BD consumer by capacity, was among them, sidelining a huge chunk of BD demand.
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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
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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