Since June, the butadiene market has been advancing with enthusiasm, all across the board, with an increase of more than 30%, making it the largest increase in chemical products in the near future. However, there are many traders who are deeply concerned about the butadiene market. “After several rounds of price hikes, butadiene prices in individual areas returned to the 20,000 mark (ton price, the same below), which was a thriving one in the downturn of the chemical market. However, this increase was not due to a demand increase. See The top signs appear, and the market outlook will be adjusted mainly."
The supply side actively pulled up this butadiene price rose sharply, and the factory raised the price to trigger the linkage reaction is the main reason. In July, just one week later, Sinopec was adjusted to increase, and butadiene rose by 2,000 yuan. Since then, traders’ offerings have continued to rise, showing a rising trend on the day. The gains began to slow down until the second half of the month.
The staff of PetroChina Northeast Sales Company believes that the following three reasons contributed to the pull-up: First, manufacturers limited supply. The manufacturers of PetroChina and Sinopec butadiene mostly supply each other, while those of Tianjin Bluestar, Panjin Ethylene, and Shanghai Secco, which are mainly exported to foreign companies, have shifted to the maintenance of mutual supply downstream and have reduced their supply to the market due to various reasons. goods. Tightening supply is the main reason for this pull up. The second is more active funds. The central bank cut interest rates twice, intending to grow steadily, thus activating the capital market and injecting some dynamism into the bulk raw material market. In the short term, the enthusiasm and enthusiasm of companies to enter the market have increased. Third, the devices have been overhauled. Lanzhou Petrochemical, Yangzi Petrochemical and other equipment began to repair, Panjin ethylene will also be scheduled to rest, follow-up supply side of the continued support of the industry's mentality. Although there are continuing shipments to Hong Kong that are not sufficient to offset the supply shortage, traders’ mentality is still optimistic.
Demand surface continues to be sluggish Terminal demand is the fundamental factor that affects the market price of products. Butadiene is mainly used in the downstream rubber industry, but tires and other end-users have a worrying situation in their production and operation, and they are unable to increase their raw material purchases and become the biggest resistance to the rise in butadiene prices.
Butadiene rubber was also flushed with butadiene, and traders gradually released early low-cost inventories. They were eager to arbitrage, and kept selling prices down slightly. At the same time, due to the lack of downstream buying, the actual transaction was hindered, and some businesses were breeding concerns. The outlook for Shunde Rubber was not optimistic. The market's offer fell slightly, and it has returned to a stalemate.
SBR increased in the role of domestic petrochemical companies, the market rose simultaneously. However, due to sluggish demand from the downstream, the holders of the stocks lowered their offers. The market's offer stopped falling, and the upside down market appeared. Some state-owned merchant 1502 rubber sales prices were lower than the purchase price of about 100 yuan. The private plastic merchants offer was even lower, and the industry's concerns grew.
The purchasers of the company's rubber tires said that the days of rubber processing companies are generally not good enough this year. With low liquidity, high product inventories, and low profitability, companies have to reduce raw material purchases, reduce operating rates, and wait for the market to improve.
It is difficult for the macroeconomic side to improve domestic consumer price index in June, the CPI rose by 2.2% year-on-year, a new low in 29 months, indicating that the demand side continues to slump, while the decline in imports in June is also more apparent. The decline in China’s demand as a major consumer country indicates that the economic situation is difficult to improve in the short term. At the same time, domestic GDP growth rate in the second quarter was 7.6%, and GDP growth in the first half of the year was 7.8%. The growth rate all fell below 8%. Although the signs of domestic economic recession were not yet obvious, the narrowing of growth rate confirmed the slowing pace of economic growth and the external demand of domestic demand. Both have declining characteristics. This is a bad factor for the chemical market.
Although the butadiene market is unlikely to continue its current rally in the short term, there is still room for growth.
First, the growth rate of butadiene production capacity lags behind demand growth. The supply and demand of the butadiene industry has been tightly balanced, and the operating rate in 2011 reached a high of 89%. Although the demand is weak this year, but the domestic surplus production capacity is limited, and the tightening of supply is still the mainstream in the future.
The second is that the butadiene main body is a by-product of the ethylene cracker, and its supply is greatly influenced by the operating rate of ethylene. After entering the third quarter, ethylene in Northeast Asia generally enters the stoppage maintenance period. The average loss of parking capacity per month is close to 15%, which greatly affects the supply of butadiene.
Third, most of our butadiene production capacity is rarely sold externally. The actual trade volume is only 30.4 million tons each year. After entering the month of August, Panjin and Zhongsha will be overhauled for one month and one and a half months, respectively, reducing the effective supply of butadiene by nearly 60%.
In summary, the butadiene market has pushed up this time, which requires the market to further digest, coupled with the downturn in demand and other aspects, weakening the upward momentum, and making it difficult to maintain the upward trend. However, in the long run, it is difficult to ease the tight supply situation and butadiene still has room for further growth.
The supply side actively pulled up this butadiene price rose sharply, and the factory raised the price to trigger the linkage reaction is the main reason. In July, just one week later, Sinopec was adjusted to increase, and butadiene rose by 2,000 yuan. Since then, traders’ offerings have continued to rise, showing a rising trend on the day. The gains began to slow down until the second half of the month.
The staff of PetroChina Northeast Sales Company believes that the following three reasons contributed to the pull-up: First, manufacturers limited supply. The manufacturers of PetroChina and Sinopec butadiene mostly supply each other, while those of Tianjin Bluestar, Panjin Ethylene, and Shanghai Secco, which are mainly exported to foreign companies, have shifted to the maintenance of mutual supply downstream and have reduced their supply to the market due to various reasons. goods. Tightening supply is the main reason for this pull up. The second is more active funds. The central bank cut interest rates twice, intending to grow steadily, thus activating the capital market and injecting some dynamism into the bulk raw material market. In the short term, the enthusiasm and enthusiasm of companies to enter the market have increased. Third, the devices have been overhauled. Lanzhou Petrochemical, Yangzi Petrochemical and other equipment began to repair, Panjin ethylene will also be scheduled to rest, follow-up supply side of the continued support of the industry's mentality. Although there are continuing shipments to Hong Kong that are not sufficient to offset the supply shortage, traders’ mentality is still optimistic.
Demand surface continues to be sluggish Terminal demand is the fundamental factor that affects the market price of products. Butadiene is mainly used in the downstream rubber industry, but tires and other end-users have a worrying situation in their production and operation, and they are unable to increase their raw material purchases and become the biggest resistance to the rise in butadiene prices.
Butadiene rubber was also flushed with butadiene, and traders gradually released early low-cost inventories. They were eager to arbitrage, and kept selling prices down slightly. At the same time, due to the lack of downstream buying, the actual transaction was hindered, and some businesses were breeding concerns. The outlook for Shunde Rubber was not optimistic. The market's offer fell slightly, and it has returned to a stalemate.
SBR increased in the role of domestic petrochemical companies, the market rose simultaneously. However, due to sluggish demand from the downstream, the holders of the stocks lowered their offers. The market's offer stopped falling, and the upside down market appeared. Some state-owned merchant 1502 rubber sales prices were lower than the purchase price of about 100 yuan. The private plastic merchants offer was even lower, and the industry's concerns grew.
The purchasers of the company's rubber tires said that the days of rubber processing companies are generally not good enough this year. With low liquidity, high product inventories, and low profitability, companies have to reduce raw material purchases, reduce operating rates, and wait for the market to improve.
It is difficult for the macroeconomic side to improve domestic consumer price index in June, the CPI rose by 2.2% year-on-year, a new low in 29 months, indicating that the demand side continues to slump, while the decline in imports in June is also more apparent. The decline in China’s demand as a major consumer country indicates that the economic situation is difficult to improve in the short term. At the same time, domestic GDP growth rate in the second quarter was 7.6%, and GDP growth in the first half of the year was 7.8%. The growth rate all fell below 8%. Although the signs of domestic economic recession were not yet obvious, the narrowing of growth rate confirmed the slowing pace of economic growth and the external demand of domestic demand. Both have declining characteristics. This is a bad factor for the chemical market.
Although the butadiene market is unlikely to continue its current rally in the short term, there is still room for growth.
First, the growth rate of butadiene production capacity lags behind demand growth. The supply and demand of the butadiene industry has been tightly balanced, and the operating rate in 2011 reached a high of 89%. Although the demand is weak this year, but the domestic surplus production capacity is limited, and the tightening of supply is still the mainstream in the future.
The second is that the butadiene main body is a by-product of the ethylene cracker, and its supply is greatly influenced by the operating rate of ethylene. After entering the third quarter, ethylene in Northeast Asia generally enters the stoppage maintenance period. The average loss of parking capacity per month is close to 15%, which greatly affects the supply of butadiene.
Third, most of our butadiene production capacity is rarely sold externally. The actual trade volume is only 30.4 million tons each year. After entering the month of August, Panjin and Zhongsha will be overhauled for one month and one and a half months, respectively, reducing the effective supply of butadiene by nearly 60%.
In summary, the butadiene market has pushed up this time, which requires the market to further digest, coupled with the downturn in demand and other aspects, weakening the upward momentum, and making it difficult to maintain the upward trend. However, in the long run, it is difficult to ease the tight supply situation and butadiene still has room for further growth.
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