Butadiene market is weak

Entering October, the domestic butadiene market continued to decline
.
Up to now, the price of butadiene in Shandong is 7950 yuan (ton price, the same below), down more than
10% from September 30.

In the future, the contradiction between supply and demand is difficult to straighten out in the short term, and the butadiene market will be weak, and it is unlikely to reverse the rise
.

Internal and external linkage market downward

According to Wang Yongtao, an analyst at Jinlianchuang, the butadiene market rose first and then declined in September, with an average price of 9,593 yuan in the month, up 11.
44%
from August.
However, with the arrival of some domestic trade cargoes, the restart of the Witt butadiene plant, the export of Fushun petrochemical sources, the obvious increase in the supply side of butadiene, and the weak performance of the external market, resulting in the market peaking and falling, and the decline continued until October
.

At present, Sinopec and some export manufacturers continue to reduce prices, coupled with the replenishment of some cargo arrivals, the supply side is abundant
.
Merchant expectations are bearish, and downstream inquiry intentions are sluggish, dragging down the trading center of the butadiene market significantly
.

Wang Yongtao said that the Asian butadiene market is weak and downward, mainly due to the expectation that China's new butadiene equipment will be put into operation in the fourth quarter, and the market supply will increase
.
The trading atmosphere in Southeast Asia was cold, with a weekly decline of more than 8%, which also suppressed the domestic butadiene market
.

At present, most butadiene plants in China maintain normal operation
.
Among them, the 100,000 tons/year of Sirbon Petrochemical, 100,000 tons/year of Nanjing Chengzhi and 70,000 tons/year of Jiutai Energy are still in the shutdown, and the 2#250,000 tons/year butadiene plant of Zhejiang Petrochemical was unexpectedly stopped on October 8, but the market response was flat
.

In addition, butadiene stocks have grown
significantly.
The current port inventory is 31,600 tons, an increase of 4,700 tons
from early October.

"In the future, the butadiene plant of Gulei Petrochemical has been restarted, and the 50,000 tons/year butadiene plant of Dongming Petrochemical is expected to
start.
The peripheral news of the butadiene market and the domestic supply and demand fundamentals are difficult to have a significant boost for the time being, and it is expected that the short-term market is relatively weak, and it is not ruled out that there is still room for
price decline.
Wang Yongtao analyzed
.

Falling raw materials supported weakening

Recently, the market for naphtha, the raw material of butadiene has shown a continuous downward trend, and the cost support of butadiene has weakened
.

As of October 17, straight-run naphtha in the Shandong market was quoted at 7,560 yuan, down 3.
2% from September 30; The price of hydrogenated naphtha in the Shandong market fell by 3.
33%
from September 30.

Specifically, crude oil prices rose, but the transmission to downstream products was blocked, and macroeconomic weakness intensified market wait-and-see sentiment
.
Compared with the entire National Day holiday, naphtha did not make up, and the naphtha, gasoline and diesel markets showed a downward trend
.

Wang Xiao, an analyst at Longzhong Information, said that due to the recent impact of the domestic epidemic, the gasoline market as a whole is weak, which has a significant
negative impact on the naphtha market.

"The main contradiction in the naphtha market is still concentrated in the continued weakness of terminal demand and low
on-market activity.
In addition, macroeconomic and policy uncertainties weighed on market sentiment, with negative markets dominating and businesses having a negative
mentality.
It is expected that the naphtha market will show a weak shock trend in the near future, which is difficult to form a strong support
for downstream butadiene.
Wang Xiao analyzed
.

The peak season for sluggish demand is not strong

As an important downstream of butadiene, the overall market of styrene-butadiene rubber and cis-butadiene rubber is characterized by
a weak peak season.
Sluggish end-use demand is a significant factor
dragging down the butadiene market.

According to He Junsong, a salesman of Jilin Petrochemical, the styrene-butadiene rubber market has weakened
in the shock recently.
Before the National Day holiday, there were signs
of loosening at the same time as the market offer of styrene-butadiene rubber decreased.
After the holiday, the styrene-butadiene rubber market offered firmly, and even a partial increase, and the trading atmosphere also improved
slightly.
However, as Shanghai rubber opened high and fell on October 10, while raw materials remained weak, the styrene-butadiene rubber market showed fatigue, and the industry's offer gradually fell and inverted
in some areas.

From the perspective of plant operation, Zhejiang Weitai styrene-butadiene rubber plant is planned to be overhauled on November 20, lasting about 30 days; Yibang styrene-butadiene rubber plant resumed production on October 12; Li Changrong's high-tech styrene-butadiene rubber plant is also scheduled to be overhauled in November for 30 days
.
On the whole, it is difficult to significantly increase the operating rate of short-term styrene-butadiene rubber equipment, and the raw materials are only maintained as needed, so the demand for butadiene continues to drag
.

Another downstream cis-butadiene rubber market
weakened.
It is difficult to improve the downstream market procurement, only sporadic procurement is required, and the transaction follow-up is limited
.

Wang Xiao and other market participants analyzed that the sales pressure of the terminal downstream tire market has increased, and some companies said that controlling inventory will become the top priority in the near future, and each tire company in the fourth quarter may maintain a flexible adjustment of the starting strategy
.
The lack of support on the demand side is expected to make it difficult for the butadiene market to get out of weakness
in the short term.