SINGAPORE (ICIS)--Asia butadiene (BD) spot prices may continue to fall further in the near term as supply outstrips demand.
Surplus stocks unloaded by Chinese petrochemical major Sinopec had weighed on the spot market, forcing sellers with regional or deep-sea cargoes-in-hand to drop their prices this week.
Sellers were heard willing to unload their stocks in the low-$1,000’s/tonne CFR (cost and freight) northeast (NE) Asia, but buying indications were mostly pegged at below the $1,000/tonne CFR NE Asia level.
“Buyers are not considering any offers above $1,000/tonne CFR NE Asia,” a trader said.
Spot prices plummeted to $1,100/tonne CFR NE Asia on 27 October, down by $125/tonne from the previous week, ICIS data showed.
“It is a buyers’ market as the buyers can pick and choose from both regional and deep-sea suppliers looking to sell their November and December shipments in Asia,” another trader said.
About 2,000 to 4,000 tonnes of surplus BD from China is expected to be available every month for export in light of the impending three-month shutdown of Sinopec Qilu’s 250,000 tonne/year styrene butadiene rubber (SBR) plant.
Sinopec Qilu Petrochemical has been running its 250,000 tonne/year SBR plant at reduced rates of 50-60% capacity and is expected to shut for three months from mid-November due to environmental concerns.
The Chinese government’s official policy of promoting a clean and green environment has resulted in petrochemical plants in north China shutting or cutting their operating rates during winter, when north China tends to be subject to heavy smog.
New BD capacities coming on-stream in China had exerted downward pressure on the BD price in Asia.
China’s Jiangsu Sailboat Petrochemical has started supplying BD to the market in mid-October.
Jiangsu Sailboat Petrochemical at Lianyungang in east China, started trial runs at the 100,000 tonne/year plant on 7 September and began production from 18 September.
Meanwhile, China National Bluestar is conducting trial runs at its new 50,000 tonne/year BD plant at Puyang city in Henan province.
Bluestar is a subsidiary of China National Chemical Corp (ChemChina).
Focus article by Helen Yan