China butadiene prices up as downstream demand rebounds

Zibo, China – China’s butadiene market has moved along an increasing trajectory since the start of October, helped by increasing downstream demand, according to a recent report by consulting firm Sublime China Information Co. (SCI).

BD prices surged after a week-long national day holiday at the beginning of October, posting a 10% increase by mid-October, said SCI in a 28 Oct report.

As of 21 Oct, market price of butadiene in Jiangsu stood at RMB9,500/tonne (€1,216/tonne), up 45% compared to late September. 

SCI linked the sharp increase in BD prices to high operating rates at most downstream industries, particularly in nitrile rubber (NBR) latex and ABS industries. 

According to the report, operating rates for NBR latex production – used in the disposable glove industry – and ABS manufacturing both exceeded 100%.

The butadiene demand has been partially met by newly added butadiene capacity which were brought on-stream in China in 2020. 

However, the plants, with a nameplate capacity of 800 kilotonne per annum (ktpa), currently have an output of around 350ktpa, due to production issues and ‘uncertainties.’

The newly added capacity "doesn’t perform as well as expected", thus making butadiene resources 'slightly tight', said SCI. 

According to the report, the entire rubber value chain, including NR futures, tire, and automotive industries, are currently performing well and improving market sentiment.

In the short run, SCI expects butadiene prices to continue to increase in China, boosted by “the bullish atmosphere.”

Based in Zibo, Shandong, SCI is a Chinese commodity market consulting firm, providing information for energy, chemicals, metal and agriculture industries.