In 2020, the domestic butadiene market as a whole will show a “V” trend. In the first half of the year, the market will drop sharply, reaching the lowest point in the middle of the year. In the second half of the year, the market will go up in a wide range and advance bravely. At the end of November, the domestic butadiene market price will reach the highest point in the year. Finally, affected by the decline of the external price and the contradiction between supply and demand, it ended hastily. According to the monitoring data of the business society, the domestic butadiene market price was 8312 yuan / ton at the beginning of 2020, and 8117 yuan / ton as of December 25, with a decrease of 2.34% during the year. The “brilliant” situation in the second half of the year ended miserably. During the year, the lowest price was 3456 yuan / ton on June 30, and the highest price was 9938 yuan / ton on November 30, with a maximum amplitude of 187.52%, showing the largest increase since October 2019.

Specifically, in the first half of 2020, the domestic butadiene market price “repeatedly broke new lows”. According to the monitoring data of the business community, the domestic butadiene market price was 3456 yuan / ton on June 30, 2020, which was the lowest price in 10 years since January 1, 2011.

In the first quarter, the domestic butadiene market fell broadly, with the price falling from 8312 yuan / ton at the beginning of the year to 5127 yuan / ton at the end of March, a decrease of 38.31%. Affected by the weather in early January, the supply of butadiene in northern China was relatively tight, and the domestic butadiene market maintained a consolidation situation for a period of time. With the approach of the Spring Festival holiday, the trading of the downstream market gradually stagnates, the export manufacturers sell the goods in advance before the holiday and during the holiday, the downstream just needs to fill the position, and the market atmosphere is mainly weak and stable. In February, the domestic butadiene market fell sharply. After the Spring Festival, due to the impact of public health emergencies, the downstream resumption of work was delayed and the logistics transportation was stagnated. However, most butadiene plants maintained normal operation, the inventory in circulation was high, and the contradiction between supply and demand in the market deteriorated, which dragged the market down rapidly. In March, the downstream rubber industry market continued to decline, and the inventory pressure was huge, so it was difficult for butadiene supply and demand fundamentals to have favorable support, and the market continued to decline.

Entering the second quarter, the decline rate of domestic butadiene market slowed down, but there was still a significant decline. The price of butadiene dropped from 5127 yuan / ton on April 1 to 3456 yuan / ton at the end of June, with a drop of 32.59%. At the end of the first half of the year, the price of butadiene in the domestic market dropped by 58.41%, breaking the new low of nearly a decade. At the end of March and the first half of April, there was a great pressure on external supply, and the transaction prices of some sources were slightly lower, which dragged down the domestic spot market. Under the expectation of unit maintenance in May, Sinopec’s price continued to rise at the end of April, which led to a wave of rise in butadiene market from the end of April to early May. In June, the domestic butadiene market continued its weak downward trend, with abundant ocean going cargo arriving at Hong Kong. Although downstream plants in Shandong have a certain demand for butadiene spot, the market is still weak under the influence of abundant supply of tank farms. Some northeast spot resources are not traded smoothly, manufacturers’ prices are under pressure and declining, and the market center of gravity follows the overall decline.

In the second half of the year, at the beginning of July, the external closing prices of butadiene in Asia, Europe and the United States rose intermittently. By September 2020, the number of days of monthly internal and external closing prices rose was 12 days. In October, the number of days for the closing price of the external market to rise has reached 10. Take CFR China as an example. On July 1, CFR China closed at US $365-375 / T, and on October 23, CFR China closed at US $1035-1045 / T, with a sharp rise of 670 yuan / T or 183.56%. The good news on the external market injected a boost into the long depressed domestic market of butadiene in the first half of the year. During this period, the traders actively followed the rise, creating a situation in which there was a shortage of goods and the domestic butadiene price continued to rise. As for the main production enterprises, take Sinopec’s sales companies as an example. According to the monitoring data of the business community, the external supply price of Sinopec’s sales companies was 3600 yuan / ton on July 1, reaching the lowest point in the year. As of October 26, the external supply price of Sinopec’s sales companies was 9200 yuan / ton, up 155.6%, which had a significant effect on boosting the market. For a long time, other major production enterprises in Northeast China, such as Fushun Petrochemical and Liaotong petrochemical, mainly used butadiene for their own use and temporarily did not export. In addition, on October 20, Wuhan ethylene 130000 T / a plant of Sinopec central China sales branch was shut down for maintenance, which seriously affected the social inventory of butadiene. Other enterprises such as Liaoyang Petrochemical Company, Dalian Hengli company and Inner Mongolia Jiutai company also increased their ex factory quotations. For a time, the butadiene market situation was difficult to control, and there were many cases of traders’ arbitrary quotations. On the other hand, affected by the higher interest rate of natural rubber futures, the price of butadiene downstream synthetic rubber has increased significantly, and the whole industrial chain has a positive linkage, which promotes the butadiene market to rise again and again.

It can also be seen from the above table that the average import price of butadiene fell month by month from the first half of the year to August. Since September, the average import price has risen sharply, further boosting the domestic butadiene market. The rising trend of butadiene market is “out of control”.

Since the end of November, there has been a slight decline in the domestic butadiene market. The main reasons are the downward drag of the external price, the export of goods from northeast production enterprises, and the resumption of production and export by individual parking enterprises, so the market supply is relatively abundant. Due to the impact of environmental protection, the start-up of downstream industry is limited, the contradiction between supply and demand is particularly prominent, and the center of gravity of butadiene market is forced to go down. With the restart of Wuhan Petrochemical Company, Jiangsu sipang plant and the gradual release of Yantai Wanhua production, the domestic butadiene market showed abundant supply side in the medium term. The downstream synthetic rubber market is low, environmental protection and other factors affect the terminal demand is weak, the supply and demand fundamentals are difficult to have a sustained positive, and the market is expected to have a rebound trend.

It can be seen from the annual comparison chart of butadiene prices of business associations that in the past three years, the domestic butadiene market showed a downward trend in the first half of the year and a slow recovery trend in the second half of the year. In the short term, the current supply is sufficient, some of the devices have been overhauled and sold out, the downstream rubber industry is affected by the environmental protection policy, the operating rate is significantly reduced, and the procurement is mainly just needed. According to the news agency, the butadiene business in China may be lower in the first quarter of 2021.