SINGAPORE (ICIS)--Asia butadiene (BD) spot prices may fall further in the near term as more supply becomes available in the market following the restart of a major plant in South Korea.
- 240,000 tonne/year Korea BD plant restarts 1 Sept
- Downstream synthetic rubber, ABS markets weak
- China domestic BD prices down 6.3% from end-Aug
Spot BD offers fell to $1,700-1,720/tonne CFR (cost and freight) northeast (NE) this week.
“Indeed, buying interest is pretty weak as supply is more than demand,” a trader said.
Offers above $1,700/tonne CFR NE Asia were met with little interest, with buyers holding back purchases amid a widening buy-sell gap.
On 31 August, spot prices were assessed at $1,700-1,750/tonne CFR NE Asia, down by $25/tonne from the previous week, ICIS data showed.
Spot prices had fluctuated between $1,675-1,750/tonne CFR NE Asia from 27 July to 31 August, according to the data.
Traders with cargoes-in-hand were under pressure to lower their offers this week, with buyers retreating to the sidelines as South Korean producer Yeochun Naphtha Cracking Centre (YNCC) restarted on 1 September its 240,000 tonne/year BD unit in Yeosu, after nearly two weeks of unplanned shutdown.
Spot October cargoes from southeast Asia, India, the Middle East and Brazil were also available, market sources said.
“The downstream synthetic rubber producers are running at lower rates and this has freed up BD supplies,” a supplier said.
End-users of BD are mostly covered for their September up to early October requirements, and have adopted a wait-and-see stance on the market.
“I don’t have any firm bid as there are more volumes available, and I have enough inventory,” an end-user said.
In China, which is a key import market for BD in Asia, domestic prices have been falling on weak demand.
“BD spot offers are coming down as Chinese buyers are not in a rush to purchase any import cargo as Chinese domestic BD prices have fallen,” another trader said.
On 4 September, domestic BD prices in east China fell to yuan (CNY) 13,300-13,600/tonne DEL (delivered), down by an average of 6.3% from end-August, ICIS data showed.
Local producer PetroChina Fushun Petrochemical cut its BD offers by Chinese yuan (CNY) 1,000/tonne on 3 September.
Focus article by Helen Yan
($1 = CNY6.84)
Picture: Butadiene (BD) is used in the production of synthetic rubber, which goes into tyres for the automotive industry. View of the tyres fixed on the road, stringing out in a long line, at a community in Changchun city, northeast China's Jilin province. (Source: Imaginechina/REX/Shutterstock)