US July BD contracts fall on weak demand, lower costs

HOUSTON (ICIS)–US July butadiene (BD) contracts settled lower on Tuesday on the back of persistently weak demand coupled with falling costs.

The ICIS Contract Reference Price (CRP) for US July BD settled at 43 cents/lb ($948/tonne) FOB (free on board), down by 3 cents/lb from June.

US BD Contracts (in cents/lb, separately issued)

	July Settlement	June Settlement
Producer 1	43	46
Producer 2	43	46
Producer 3	43	46
Producer 4	43	46

Supply is ample to meet soft demand, which has been the trend all year and is expected to last through 2019.

Downward pressure is likely to persist if upstream markets remain soft as supply is likely to continue outpacing demand.

Europe July contracts also fell on declining naphtha costs and soft fundamentals.

BD is a key feedstock for synthetic rubbers, largely styrene butadiene rubber (SBR), which is used in tyre manufacturing. BD is extracted from crude C4s.

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

Image above shows tyres, which are made with BD. Photo by Mood Board/REX/Shutterstock