According to the Commodity Market Analysis System of the Business Society, the domestic butadiene market in July saw a unilateral upward trend. From July 1st to 27th, the domestic butadiene market price increased from 5973 yuan/ton to 7201 yuan/ton, with a price increase of 20.56% during the cycle and a year-on-year decrease of 26.03%.

At the beginning of the month, major production enterprises such as Sinopec raised their factory quotations, which boosted the mentality of merchants in offering, but downstream companies resisted high prices. The transaction of some offshore cargo in South Korea and Southeast Asia is still acceptable, but the price is still lower than the domestic spot price, so it is temporarily difficult to bring a significant boost to the domestic market.

In mid month, the domestic butadiene market saw a significant increase. On the one hand, parking news was concentrated, and the utilization rate of production capacity in the butadiene industry decreased; The high transaction price of the external market has boosted the sentiment of domestic merchants; At the same time, the downstream synthetic rubber market has strengthened, the price difference between upstream and downstream has widened, and the fundamentals of the butadiene market have been supported.

In the latter half of the month, prices for external and domestic production enterprises were firm, boosting merchants’ attitude towards offering. At the same time, downstream construction and profit conditions were still good, and there was some support for demand in the face of the market. With the arrival of imported cargo at the port, port inventory has increased, and some early maintenance equipment has restarted, leading to an increase in domestic production. Supply side expectations have led to cautious downstream inquiries, and the increase in butadiene market prices has weakened.

On the cost side, the crude oil market surged in July, and WTI crude oil reached its highest point in the past three months. The settlement price of the Brent crude oil futures main contract was $82.74 per barrel, an increase of $1.67 or 2.0%. The oil market has been boosted by the expected tightening of supply and continued fermentation, as well as the rebound in demand. As of July 26th, the Federal Reserve announced a 25bp interest rate hike, coupled with a lower than expected decline in US crude oil inventories, resulting in profit taking in crude oil futures and pressure on prices.

In July, the price of domestic local refining Naphtha continued to rise. Supported by the just need of terminal restructuring, refineries actively pushed it up, and the deal was good. As of July 27, the benchmark price of Naphtha of the business community was 8134.00 yuan/ton, up 5.24% from 7729.00 yuan/ton at the beginning of this month. The cost of butadiene is significantly positive.

On the supply side, the main production enterprise Sinopec East China Sales Company has repeatedly raised the price of butadiene to 7200 yuan/ton. The short-term supply side of butadiene is affected by a bullish trend.

On the demand side, due to the favorable cost of butadiene and the impact of production enterprise equipment maintenance, some products in the downstream synthetic rubber market have shown a significant increase, while downstream industry profits are still acceptable. There is currently no significant drag on the demand side. The demand for butadiene is relatively strong.

In terms of external trading: On July 26th, the closing price of butadiene in Asia remained stable: FOB South Korea was quoted at $665-675 per ton; China CFR reports 715-725 US dollars per ton. The external price of butadiene in Europe remained stable: FOB Rotterdam closed at $305- $315 per ton; FD Northwestern Europe closed at 465-475 euros/ton.

In the future, it is predicted that some maintenance devices will be restarted one after another, and there is an expectation of an increase in domestic production. Butadiene analysts from Business Society predict that the domestic butadiene market will be mainly volatile and organized.