US butadiene (BD) supply levels are expected to remain healthy into the spring, while global markets await clearer demand signs from downstream sectors.
Separate March contract price nominations were unchanged from the producers’ February settlements amid ample supply of both BD and feedstock crude C4 (CC4), and persistent sluggish demand.
The ICIS Contract Reference Price (CRP) for US March BD settled at 49.25 cents/lb ($1,086/tonne), flat from February and largely in line with market expectations.
"Demand is still relatively weak, and supply is long enough here," a source said.
Market players anticipated little, if any, movement from February price levels as supply and demand fundamentals are unchanged and expected to remain that way through March.
US spot values reconnected with contract levels in February on bids and offers, closing the gap with Asia spot prices.
Offers have been heard higher than contract prices, although some market players have questioned whether those are workable given ample supply.
"I don't imagine someone would pay a premium at the moment," a source said.
Market players in all regions are watching for signs of a demand uptick in Asia, where activity has not yet picked up but is expected to.
Asia prices prices are stable amid healthy supply levels and sluggish demand in the styrene butadiene rubber (SBR) sector.
Demand from acrylonitrile butadiene styrene (ABS) producers is strong.
March contracts in Europe rose, largely on higher naphtha feedstock costs.
Anticipation of tighter supply during Europe’s spring turnaround season supported the increase, although this has yet to take place as customers have prepared.
US supply is expected to remain ample during 2019 amid a number of cracker startups, which will improve availability of CC4.
Additionally, cracker operators continue to favour heavier feedstocks such as propane and butane, which yield more CC4 than ethane does.
Some cracker operators have favoured heavier feeds in order to limit ethylene.
Relatively lower crude prices compared with 2018 have kept heavier cracking economic.
Major US BD producers include ExxonMobil, LyondellBasell, Shell Chemical and TPC Group. - ICIS-