Price Trend
Butadiene market rebounded in May 2019. Business Association monitoring showed that the price of butadiene at the beginning of the month was 7834 yuan/ton, and at the end of the month, the price of butadiene was 8551 yuan/ton, an increase of 9.15% in the month. Prices fell by 28.45% over the same period last year.
II. Analysis of Influencing Factors
Product: This month, due to the load increase of Jihua and Fushun styrene-butadiene rubber plant, the export volume of butadiene in Fushun Petrochemical Company has greatly decreased. In addition, the delayed restart of Sirban and Shandong Huayu plants, the delayed shipment of Jiutai in Inner Mongolia and the unexpected release of supply in the northern market are the main factors to boost the market. Within the month, a small number of high-grade goods in Northeast China were markedly increased in price, and brokers’offer followed. With the rising price, the enthusiasm of merchants to ship goods in the middle and later period of this month has increased. The supply of qualified products of Jiutai and Shenhua is relatively abundant, and the restart of Srbon and Huayu devices, to some extent, has inhibited the space for the market to continue to rise. However, under the support of a small number of high-grade products and strong external offer, the domestic market is mainly consolidated after the rise.
Start-up rate: In May 2019, the overall start-up rate of butadiene industry in China increased slightly to about 70.1%. During the month, Shanghai Petrochemical Company, Silbang Petrochemical Company and Shandong Huayu Plant were restarted one after another, while Jiutai, Inner Mongolia, added 70,000 tons per year of low-load operation of butadiene plant, which boosted the start-up situation. In June, the Lanhua plant is scheduled to restart. Nanjing Chengzhi has an additional 100,000 tons/year plant. Although Liaoyang Petrochemical has a parking overhaul plan, it is expected to start or continue to rebound.
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Industry: According to the price monitoring of business associations, in May 2019, there were 21 commodities rising annually in the chemical sector, of which 9 commodities increased by more than 5%, accounting for 12.2% of the monitored commodities in the sector. The top three commodities were epichlorohydrin (11.73%), nitric acid (9.51%) and butadiene (9.15%). There are 48 kinds of products with a decline of more than 5%, accounting for 31.1% of the monitored products in this sector. The products with the first three declines are hydrochloric acid (-60.56%), sulfuric acid (-42.25%) and TDI (-26.21%). This month’s average rise and fall was -3.9%.
3. Future Market Forecast
In the future, the positive side is that the external market is strong and the downstream market just needs to be supported. Empty side: Jiutai plant load in Inner Mongolia is expected to increase, downstream Shunding industry part of the plant stops, start-up declines, and the northern spot resources are abundant. The recent strong shipping offer from June to July, coupled with a small number of high-grade goods in Northeast China, has brought support to the mentality of some businesses. However, with the restart of some domestic devices and the continuous release of new manufacturers’output, the market supply and demand fundamentals are limited. With the increase of supply in the north, it is expected that there will be some room for a fall in the northern market in June. Eastern China suggested that attention should be paid to the storage pressure in tank farms and the guidance of external information. Although the offer was high for the time being, butadiene analysts from business associations predicted that the market support was weakening with the reboot of Korean plant. They also did not rule out the weakening expectations.
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