US May BD contracts nominated down 20, 29 cents/lb

24 April 2017 23:06 Source:ICIS News

US May BD contracts nominated down at 20, 29 cents/lbHOUSTON (ICIS)--US butadiene (BD) contracts for May have been nominated by two producers at drops of 20 cents/lb and 29 cents/lb, in line with market sentiment as supply improves, sources confirmed on Monday.

If accepted by buyers, the nominations put May contract prices for one producer at 64 cents/lb ($1,411/tonne) and another producer at 73 cents/lb, down from individual April settlements of 93 cents/lb.

BD prices had spiked sharply in early 2017 as supply tightened amid production issues and producer allocations. However, April BD contracts settled at a 17 cent/lb decrease on improved supply as production issues have resolved and derivative plants are offline.

On the production side, one of two US Gulf BD extraction units completed a turnaround in late March, while the other is expected to finish at the end of April.

On the demand side, one derivative US Gulf plant is expected to be on turnaround through the end of May. Another derivative plant, an emulsion styrene butadiene rubber (E-SBR) unit, had shut production in late March, and the company had filed for bankruptcy protection in early April.

During April there has been additional downward pressure as BD values have fallen in Asia and in Europe, and as inbound BD shipments are expected to arrive in the US.

US market participants noted the wide spread between US and Asia prices as a main factor for the downward pressure in the US market.

Asian BD spot prices have dropped by more than $300/tonne since the end of March. Northeast Asia BD spot prices were assessed on Friday at $750-800/tonne below US April contract levels.

US BD contracts typically settle at the end of the month for pricing in the upcoming month.

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

In cents/lb

May Nom

April Settle

Producer 1

64

93

Producer 2

73

93

Producer 3

TBD

93

Producer 4

TBD

93

By Jessie Waldheim