Market and product

Supply side to actively pull up

The butadiene prices soared, manufacturers price increases caused by the linkage reaction is the main reason. In July, only a week, Sinopec tripled hike, butadiene or up to 2000 yuan. Since then, the trade Daily plate continue to rise, showing the trend of a rise of 1. To a second half rally began to slow down.

Oil Northeast sales staff believes that the following three reasons contributed to the pull-up: First, the manufacturers limit the supply of goods. Butadiene manufacturers of CNPC, Sinopec and more to each other for export-orientated enterprise of Tianjin Blue Star, Panjin Ethylene and Shanghai Secco, due to many reasons, converted to maintain each other for downstream mainly on the market reduction for cargo. Tighter supply-side is the pull up the main reason. Second, funds are more active. The central bank cut interest rates twice, and aimed at steady growth, and active capital markets for the bulk of raw materials markets, inject a little vitality short-term enhanced the admission of the industry initiative and to cover short positions enthusiasm. The device successively overhaul. Lanzhou Petrochemical, Yangzi Petrochemical, equipment maintenance, Panjin Ethylene is scheduled for rest, the continued support of the follow-up supply-side positive mentality of the industry. Although there have cargoes to Hong Kong, not enough to offset the shortage of supply of good traders mentality is still more optimistic.

The demand side remains in the doldrums

End demand is about the fundamental factors of the market price. The main supply of butadiene downstream rubber industry, production and management of tires and other end-user companies is worrying, the procurement of raw materials can not be a big bang, the biggest obstacle to butadiene prices.

Butadiene rubber was rosy in the butadiene with up under the early low-priced stocks, traders gradually release, eager to arbitrage, and continue to slightly depress the sales price, the upside down market are frequent. At the same time, due to the lack of downstream buying interest, the actual transaction blocked, part of the business to breed fears, butadiene rubber market outlook is not optimistic about the market offer slightly lower, and has returned to the stalemate.

Styrene-butadiene rubber under the domestic petrochemical enterprises hike, the market has risen along. But the poor downstream demand, holding goods manufacturers have to suppress the offer. Stop rising decline in the market offer, appear upside down market, part of 1502, state-run businesses, gum sales price below the purchase price of 100 yuan or so, private rubber merchants offer more low, the industry fears gradually since.

Guido tire company procurement staff said that this year the days of rubber processing enterprises generally poor. Less liquidity, high inventory, low profitability, companies had to reduce the procurement of raw materials, reduce the operating rate, wait for the market upturn.

The macro side is difficult to

Domestic June consumer price index (CPI) rose 2.2 percent, the highest since January 29 lows, that the demand side continues to slump, while the June decline in imports is also more obvious. Chinese demand fell as the consuming countries, show that the economic situation in the short term is difficult to Domestic second quarter GDP growth of 7.6% GDP growth in the first half of 7.8 percent growth rate fell below 8%, although the signs of domestic economic recession is not yet clear, but the increase was narrowed confirms the slowdown in the pace of economic uplink, domestic and external demands characteristics were decreased. This is a negative factor for the chemical market.

Although the butadiene short-term market is difficult to continue the current rally, but still room to rise.

First, butadiene capacity growth to lag behind demand growth. Butadiene industry supply and demand has been in a tight balance, the operating rate of 2011 reached a high of 89 percent. This year, although weak demand, but the domestic surplus production capacity is limited, the tighter the supply side is still in the future mainstream.

Second, the main body of butadiene is a by-product of the ethylene cracker, its supply by the rate of ethylene started great. Into the third quarter, the Northeast Asia ethylene universal access to maintenance shutdown period, the average monthly loss of parking capacity close to 15% of butadiene supply a great impact.

Third, the vast majority of our butadiene production capacity very few external sales in each of the real volume of trade was only 30.4 million tons. August, Panjin and sand overhaul a month and a half months, nearly 60 percent will reduce the effective supply of butadiene.

In summary, the butadiene market overwhelmed by pushing up the need to market to further digestion, combined with the downturn in demand, weakening upside momentum, it is difficult to sustain gains. But in the long run, the tight supply situation is difficult to alleviate, butadiene still have further room to rise.