US BD spot prices slide on feedstock availability, costs

Source: ICIS News

2018/12/07

HOUSTON (ICIS) --US butadiene (BD) spot prices fell on the high end amid continued downward pressure from improved feedstock availability, weakening upstream markets and a seasonal demand lull.

US BD spot prices were assessed at 38.00-49.50 cents/lb ($838-1,091/tonne), compared with 38.00-56.25 cents/lb in the previous week.

Production of upstream crude C4 has increased as crackers have increased usage of heavier feedstocks. Declining costs for upstream crude oil have lowered costs for the heavier feedstocks while some margin recovery also has allowed an increase in heavier feedstock usage.

The usage of ethane feedstock had increased significantly during much of 2018 amid new ethylene capacity and tight cracker margins. Ethane produces the least amount of co-products like crude C4 when cracked.

As additional ethylene capacity comes on line in the US Gulf, crude C4 production is expected to increase even if ethane usage remains high.

A seasonal demand lull for BD also added some downward pressure amid year-end de-stocking and as the colder winter weather slows some downstream sectors like the construction industry. Demand is expected to rebound in early 2019 amid as inventories are rebuilt.

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