According to the Commodity Market Analysis System of Shengyi Society, the domestic butadiene market first fell and then rose in August 2024. From August 1st to 29th, the domestic butadiene market price increased from 12662.50 yuan/ton to 12925 yuan/ton, with a price increase of 2.07% during the period.
In the first half of the month, the butadiene market continued to operate weakly, and downstream market demand remained lukewarm, providing limited support for market sentiment. The overall market performance 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 dual weak supply and demand pattern, the butadiene market trend was relatively weak.
Mid month: The butadiene market experienced narrow fluctuations, with a slight rebound in market prices, but the magnitude was limited. During the week, some enterprises in Shandong region suspended their export plans, which led to a slight rebound in spot market prices in the region and indirectly affected the slight increase in market quotes in East China. However, downstream market demand has remained lukewarm, with limited support for market sentiment, resulting in limited overall volatility.
Late of the month: The butadiene market began to rebound in late of the month, with tight supply in some areas of Shandong and Jiangsu. Holders of goods showed strong reluctance to sell, and prices continued to rise. As the price difference between the north and south gradually widened, the East China market heated up. In terms of downstream demand, the synthetic rubber market has performed well recently, with stable prices and occasional increases, which has once again boosted market sentiment. As of the 29th, the self pickup price in East China is around 12700-12800 yuan/ton.
Cost wise: In August 2024, the crude oil market maintained a range oscillation trend. In the first half of the month, the crude oil market first fell and then rose. In early August, due to OPEC+’s 2.2 million barrels per day production reduction, it will be implemented until the end of September. However, from October onwards, depending on market conditions, production may gradually increase, which is bearish for the crude oil market. In addition, 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. Starting from mid August, the crude oil market began to rise significantly due to the significant decrease in US crude oil inventories and the easing of geopolitical conflicts. Overall, the crude oil market fluctuated within a range. Looking ahead, crude oil analysts from Shengyi Society believe that the current geopolitical instability continues to affect the market. The traditional peak season in the United States is coming to an end, and coupled with poor economic data performance, the crude oil market is mainly volatile.
Supply side: The listed price of butadiene for various sales companies of Sinopec has been raised twice in a row to 13000 yuan/ton at the end of the month, with a cumulative increase of 500 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 in early September; Jilin Petrochemical’s 190000 tons/year butadiene plant shut down on August 25th and is expected to restart in October. Downstream supporting facilities will also shut down simultaneously, with limited impact on the market; Since the shutdown and restart of Shenghong Refining’s 200000 tons/year butadiene unit in early August, the current operating rate is relatively low. Overall, there are many equipment maintenance tasks, and the supply of butadiene in the market is relatively tight.
On the demand side: According to the commodity market analysis system of Shengyi Society, as of August 28th, the market price of butadiene rubber in East China was 15040 yuan/ton, an increase of about 2.7% from 14890 yuan/ton on August 1st. Especially since late August, the overall price of butadiene rubber has risen significantly, with a slight increase in the high price of raw material butadiene; Shunding rubber production has increased; Downstream tire production has slightly increased. The supply price of butadiene rubber has been gradually raised recently, and as of August 28th, the ex factory price of butadiene rubber for PetroChina Northeast Sales Company is 15000 yuan/ton.
External market: The August butadiene market experienced mixed fluctuations, with FOB prices in South Korea ranging from $1445-1455 per ton as of August 27th; China CFR reports $1465-1475 per ton; European butadiene FOB Rotterdam closed at $1115-1125 per ton; FD Northwest Europe closed at 1085-1095 euros/ton.
Market forecast: Currently, the overall supply of butadiene in the market is tight, and holders have a strong mentality of being reluctant to sell and raising prices. Market offers continue to rise at the end of the month. The downstream synthetic rubber market has been continuously rising in market prices since the end of August, which has given a strong boost to the butadiene market. Currently, low-priced sources of goods are difficult to find in the market, and downstream suppliers are still replenishing inventory as needed. Overall, with the boost of favorable supply and demand, it is expected that the butadiene market will have a strong trend in the short term, and downstream transactions will be the focus of attention in the future.
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