Market and product

Spot butadiene (BD) prices in Asia may continue falling in the near term, with buyers retreating to the sidelines as tight supply conditions have eased following the restart of Shell’s cracker in Singapore, market sources said on Friday.

Buyers are unwilling to consider spot offers above $1,400/tonne CFR (cost and freight) northeast (NE) Asia, they said.

On 4 November, BD prices were assessed at $1,450/tonne CFR NE Asia, down by about 11% from mid-October, ICIS data showed.

“Buyers are asking for lower prices, with bids as low as $1,300/tonne CFR NE Asia,” a trader said.

Buyers are holding back their purchases, anticipating prices to fall further, but some traders are unwilling to lower their offers, saying demand is still firm.

“We are getting enquiries and will not sell below $1,450/tonne CFR NE Asia,” another trader said.

Between 5 August to 14 October, BD prices had been on rising sharply, gaining a cumulative $650/tonne or 67% because of tight supply, according to ICIS data.

But appetite for spot cargoes started to wane in mid-October, prompting the reversal of the price trend.

Shell’s 7 November lifting of a force majeure on supply of base chemicals from its Singapore cracker facility also eased regional BD supply.

The company halted supplies from its Singapore production site on 29 September following an outage at its cracker complex 27 September due to compressor issues. Theshutdown lasted more than a month.

Shell's Pulau Bukom cracker produces 960,000 tonnes/year of ethylene; 450,000 tonnes/year of propylene; and 155,000 tonnes/year of BD, according to ICIS data.