US Dec BD fully settles down 13%

HOUSTON (ICIS)–US December butadiene (BD) contracts reached a full settlement at a decline of 13%, sources confirmed on Tuesday.

The 6 cent/lb ($132/tonne) drop puts contracts at 39 cents/lb on an FOB (free on board) basis.

The drop was mostly driven by declining values overseas, as Asian spot prices have fallen more than $300/tonne since the start of October.

That was the result of weaker natural rubber prices, which pushed down synthetic rubber and BD values.

US BD prices are also facing increased supply, with all operators back to normal rates following Hurricane Harvey.

Demand for US BD has also been softening, in line with expectations and mostly because of seasonal factors.

Sources said the drop in December BD contracts will also likely push down on spot prices, as the current market length means buyers are expecting discounts to contract prices.

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

Image below shows tyres, which are made of styrene butadiene rubber (SBR), a major derivative of BD. Source: Mood-Board/REX/Shutterstock