Price Trend

In June 2019, the market of butadiene fluctuated lower. Business Association monitoring showed that the price of butadiene at the beginning of the month was 8551 yuan/ton, and at the end of the month, the price of butadiene was 8407 yuan/ton, with a drop of 1.75% in the month. Prices fell by 23.21% over the same period last year.

II. Analysis of Influencing Factors

Products: In June, the domestic butadiene market showed a weak overall performance although there was a slight fluctuation in the market within the month. As of the 28th, Sinopec’s supply price was 8600-8700 yuan/ton, up 100-200 yuan/ton from the end of last month; the base price of Liaotong Chemical Bidding was down 800 yuan/ton to 8010 yuan/ton from last month, and the trading range dropped about 900 yuan/ton. At the end of May and the beginning of June, new equipment was put into operation in Jiutai, Inner Mongolia, and a small amount of spot was flowing into the downstream factories in the north. In addition, the supply and flow pats at some nodes of Fushun Petrochemical Company aggravated the downstream wait-and-see mentality. The spot market in the North continued to decline slightly in early June. With the gradual accumulation of demand in the north and the relative concentration of replenishment in the middle of the month, a large increase in the price of a small amount of goods in the North has been boosted, which has prompted the market to rise rapidly. However, with the decrease of synthetic rubber price and the flow of goods in Fushun Petrochemical Company, the market has rapidly turned downward. Within the month, the price difference between inside and outside is hanging upside down, and the arrival of imported goods is limited, but the inquiry intention in the lower reaches of East China is low, the market supply and demand are weak, and the market fluctuation is not large. Overall, the market range of butadiene shocks in the month.

Installation: Liaoyang Petrochemical 30,000 tons/year butadiene extraction plant stopped around June 5, and the expected maintenance time lasted 30-40 days. Shandong Wanda 60,000 tons/year butadiene plant continued to stop within a month, there is no clear start-up plan. Jiutai oxidation dehydrogenation unit in Inner Mongolia operates at low load within a month and has limited export. Puyang Bluestar 50,000 tons/year butadiene plant stopped for overhaul on June 27, with an estimated duration of about 10 days. Lanzhou Petrochemical’s 135,000 tons/year butadiene plant was restarted around June 27, and its normal output is expected to resume in July. The MTO plant in Chengzhi upstream of Nanjing was commissioned on June 26, and the commissioning time of butadiene plant is expected to be in early July.

Industry: According to the price monitoring of business associations, in June 2019, there were 34 commodities rising annually in the chemical sector, of which 11 commodities increased by more than 5%, accounting for 13.1% of the monitored commodities in the sector; the top three commodities were epichlorohydrin (20.33%), hydrochloric acid (20.00%) and calcium carbide (11.04%). There are 43 kinds of commodities with a decline of more than 5%, accounting for 19% of the monitored commodities in this sector. The products with the first three declines are hydrogen peroxide (-21.81%), silicone DMC (-17.38%) and butanone (-13.71%). This month’s average rise and fall was -0.38%.

3. Future Market Forecast

In the future, the positive side is that due to the upside-down price of the internal and external plates, the arrival of shipments in June is limited, and the downstream just needs to be supported. On the negative side, the July load of the Jiutai plant in Inner Mongolia may increase, while the July output of Chengzhi in Nanjing still needs attention. The spot resources in the north are abundant. With the reboot of the Korean plant, the external supply and demand are weak, and there is no lack of expectations of decline. Judging from July, the load of Jiutai plant in Inner Mongolia may increase, the spot supply in the north is still abundant, the downstream just needs to follow up limited, and the market may continue to be weak. Outside, as South Korea’s equipment returned to normal operation, supply and demand weakened dragged down, the current high price market is not without falling expectations. With the normalization of price differentials between the north and the south of China and at home and abroad, the performance of the East China market is under pressure, and the news of Chengzhi’s new production capacity in Nanjing has an impact on the mentality of some businessmen. In a comprehensive consideration, butadiene analysts of business associations expect that the domestic butadiene trend will continue to be weak in July, and the market will continue to explore possibilities.