US April BD contracts rise on snug supply

HOUSTON (ICIS)–US April butadiene (BD) contracts fully settled on Friday, up 7.3% on the ICIS direct average basis.

The increase puts contracts at 62.75 cents/lb ($1,383/tonne), up from the March ICIS Direct Average of 58.50 cents/lb.

Sources confirmed four US BD producers settled separately at 61 cents/lb, 62 cents/lb, 63 cents/lb and 65 cents/lb.

March settlements saw two producers separately settle at 58 cents/lb and two other producers separately settle at 59 cents/lb.

Several buyers said pricing should have settle in the low-60s cents/lb, as overseas markets had started to soften at the end of March.

These buyers added that although supply was tight in March and set to be snug in April, bringing in imports in the mid-60s cents/lb would represent buying at the market’s near-term peak.

Other buyers said US contracts needed to move up to the mid-60s cents/lb in order to incentivise imports because of tight supply.

At the end of March, sources said one producer had a cracker on turnaround, and another producer was having shipping difficulties with an overseas cargo.

Both issues were cutting into supply of upstream crude C4, which led some US producers to ask for buyers to take less than contractual maximums.

However, most buyers said they needed full volumes, as demand is ramping up in April.

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

Butadiene (BD) is a raw material used in the production of tyres.