According to the Commodity Market Analysis System of Shengyi Society, from August 2nd to August 9th, the domestic butadiene market price decreased from 12662.57 yuan/ton to 12425 yuan/ton, with a price reduction of 1.88% during the period. This week, the butadiene market continued to operate weakly, and downstream market demand remained lukewarm, providing limited support for market sentiment. The overall performance of the market was weak, dragging down market quotes. On the supply side, this week’s quoted goods increased compared to the previous period, and the market supply was relatively loose. Under the weak supply-demand pattern, the butadiene market trend is relatively weak. As of August 8th, the self pickup price of butadiene in East China was around 12150 yuan/ton, a decrease of about 200 yuan/ton compared to the same period last week. The ex factory price of Sinopec is 12500 yuan/ton, reduced by 300 yuan/ton.
On the cost side: During this cycle, the crude oil market has declined. On the one hand, the OPEC+production reduction of 2.2 million barrels per day will be implemented until the end of September, but from October onwards, depending on market conditions, production may gradually increase, which is bearish for the crude oil market. On the other hand, the poor non farm payroll data and rising unemployment rate released by the United States in July, coupled with poor global economic data, have intensified market concerns about the demand outlook and increased negative pressure on the psychological level, leading to a decline in the crude oil market trend. Overall, the crude oil market has significantly declined during the cycle, with a negative rate of change in crude oil. As of August 8th, international crude oil futures have risen. The settlement price of the main contract for WTI crude oil futures in the United States was $76.19 per barrel, an increase of $0.96 or 1.3%. The settlement price of the main Brent crude oil futures contract was $79.16 per barrel, an increase of $0.83 or 1.1%
Supply side: The listed price of butadiene for various sales companies of Sinopec has been lowered to 12500 yuan/ton. The Northern Huajin 120000 tons/year butadiene plant is scheduled to shut down for maintenance on July 12th and is scheduled to restart at the end of August; The second unit of Fujian United and Zhejiang Petrochemical has been restarted in June. Recently, there has been little change in the domestic comprehensive operating rate, and the supply of butadiene is relatively stable. But with the gradual increase in load after some devices resume production, the market expects that the future supply may be relatively loose, and negative factors on the supply side will emerge.
Demand side: The downstream synthetic rubber market continued to weaken this week, affected by low corporate profits. The downstream terminal market maintained a strong demand for raw material butadiene and had a strong resistance to high priced sources. The prices of styrene butadiene and butadiene rubber slightly declined during the week. The price of raw material butadiene continues to decline, and the cost support for styrene butadiene rubber weakens. Downstream tire production has recently declined, weakening the support for rigid demand for styrene butadiene rubber; The production of styrene butadiene rubber is at a low level, and the inventory pressure of enterprises is not significant. The demand performance is weak, and the demand support for the butadiene market is insufficient.
On Thursday (August 8th), the closing price of butadiene in foreign markets was partially raised: among them, the FOB price in South Korea was reported at 1515-1525 US dollars/ton, unchanged; China CFR reported 1515-1525 US dollars/ton, unchanged; European butadiene FOB Rotterdam closed at $1175-1185/ton, unchanged; FD Northwest Europe closed at 1095-1105 euros/ton, up 5 euros/ton.
Market forecast: In the near future, there will be a significant resumption of production in the butadiene plant, and with the subsequent increase in load on the supply side, the market expects a relatively loose supply in the future. From the perspective of demand, downstream demand has always maintained strong support and price trends are weak. Downstream synthetic rubber companies have been affected by declining profits, and their purchasing enthusiasm has been significantly weakened recently. As a result, the market atmosphere is more cautious. Overall, the recent performance of the butadiene market has been weak in both supply and demand, and it is expected to maintain a stable, moderate, and weak trend in the short term. There may still be room for further decline, and the focus will be on downstream market reception in the future.
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