US May BD settles down 29 cents/lb on improved supply, lower demand

HOUSTON (ICIS)–US May butadiene (BD) contract prices settled sharply lower on Friday as imports and resolved production issues improved supply and as downstream outages weighed on demand.

May contract prices were settled at 64 cents/lb ($1,411/tonne), down from 93 cents/lb in April. US BD contracts typically settle at the end of the month for pricing in the upcoming month.

Contract prices had surged in the first quarter to a multi-year high in March as production issues and a turnaround caused two producers to implement sales allocations. Production issues were resolved during March and April, and neither sales allocation is expected to remain in May.

Imported material has also helped improve supply, with three cargoes heard to have arrived in the US during 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) plant, had shut production in late March, and the company had filed for bankruptcy protection in early April.

The US BD market also has been under pressure from softening prices in other regions. In both Asia and Europe, spot BD prices have moved lower throughout April, although prices in Asia rebounded slightly this week. Europe contract BD prices settle sharply lower this week.

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