Market and product

Asia butadiene (BD) spot prices may still have room to fall lower in December, if prompt parcels are still available, market sources said.

BD spot prices fell to an average of $690/tonne CFR (cost and freight) northeast (NE) Asia on 27 November, down by 14% since 30 October, when prices averaged $795/tonne CFR NE Asia, ICIS data showed.

“BD price will continue to fall if there is still prompt parcel available in December,“ a trader said.

“There are more than 10,000 tonnes of spot cargoes from India, Iran and Southeast Asia still looking for customers, and if a trader has to offload some prompt parcels, this will put further downward pressure on the BD price,” an end-user said..

Asia BD prices have been under downward pressure due to ample supply and waning demand from the downstream synthetic rubber (SR) and acrylonitrile butadiene styrene (ABS) producers, market sources said.

However, an extended, unplanned outage at Shell, may halt the BD price downtrend and generate a rebound, sources said.

The oil major issued a statement on Friday, 27 November, saying that the Shell’s Pulau Bukom manufacturing site will experience some controlled flaring over the next few days due to maintenance work.

“If Shell runs short, the market may bottom out and rebound,” a trader said.

Shell’s 960,000 tonne/year cracker at Bukom experienced some issues last week, resulting in production cuts of several products, including ethylene, propylene and monoethylene glycol (MEG). The cracker site also has a 155,000 tonne/year BD extraction unit.

However, other traders said that Shell’s unplanned production issues were minor and have no big impact on the BD price downward price trend, given the weak market fundamentals of ample supply and poor demand.

“Let’s wait and see what happens next,” another trader said.