US November BD contracts fully settle down 13%

Source: ICIS News


HOUSTON (ICIS)--US November butadiene (BD) contracts fully settled down 13%, sources confirmed on Wednesday.

The settlement puts contracts down 7 cents/lb ($154/tonne) at 45 cents/lb on an FOB (free on board) basis.

The downward pressure on the settlement was largely driven by overseas markets, where BD spot prices have fallen more than $300/tonne in the past month.

This was the result of natural rubber (NR) prices falling, putting downward pressure on synthetic rubber prices to keep their market share steady.

This then forced upstream BD sellers in Asia to lower their prices, sources said.

US BD prices were also facing downward pressure on expected improvements in supply, as one US producer was set to reach desired operating rates in early November.

Domestic BD demand was also reported to be softening, in line with seasonal factors.

Initially, US BD contracts were nominated for declines of 3 cents/lb, 5 cents/lb and 7 cents/lb by various producers.

The strong downward pressure from weaker overseas values pushed sellers to settle separately at the lowest nomination, sources said.

Major US BD producers include ExxonMobil, LyondellBasell, Shell Chemical and TPC Group.