Europe BD spot export prices poised to firm further

08 September 2017 13:09 Source:ICIS News

Upbeat Chinese investor. Source: Imaginechina/REX/Shutterstock

LONDON (ICIS)--European butadiene (BD) spot export prices are poised for further increases as the Asian price uptrend continued on the back of stocking activities in China, market sources said on Friday.

Current spot export prices were “at least at $1,000/tonne”, several sources said.

While there has been talk of trade concluded at this level, no details of the business have been forthcoming.

With Asian prices currently being assessed at around $1,500/tonne on a delivered basis, European players say that there obviously is room for further gains in the European export price.

Freight rates from Europe to Asia have been around $200/tonne recently.

Not only is Asian spot demand and pricing conducive to higher European export prices but European supply is also constrained given planned turnarounds at both the cracker and BD unit level.

This has led to strong competition amongst traders keen to capitalise on every available opportunity.

“Every single trader is looking for volume for September, and even October,” a source said.

“They want to load as much as they can, some to complete cargoes, some to build cargo from scratch. They are betting on higher prices in Asia,” the source added.

Hurricane Harvey has also helped to shape sentiment. #

While the uncertainties over BD plants and BD derivative restarts, logistical and personnel challenges in the US Gulf coast region persist, players are generally bullish over the impacts on the global market, not least because of perceptions of the extent of demand which will be required in recovery.

“The impact is not clear, the question is how quick they will restart,” a second source said.

“There will be a large demand for end-products which will in turn create demand for BD, so I am bullish,” a third source said.

Some players remain cautious and others do not believe that the uptrend in Asia will be sustained after China’s National Day holidays in early October.

Pictured above: A Chinese investors walks past a screen displaying prices of shares. Asian BD prices continued increasing as China's stocking gained pace
Source: Imaginechina/REX/Shutterstock

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By Nel Weddle