European butadiene prices to remain firm amid expected tight supplies

09-Oct-13

European butadiene prices are expected to remain firm as supplies are seen remaining tight on a combination of propane cracking and good export demand, as per Platts. The four-year low spot price seen in July at US$597.50/mt FOB Rotterdam was unlikely to repeated this year or at the start of next year, despite still subdued demand. A trader reported hearing offers in Europe at around US$1240-1245/mt FOB ARA, with Asian offers seen at US$1700/mt CFR China. Transactions at these levels had not been seen yet but sources said it was a matter of time. European FOB R'dam prices were assessed at US$1215/mt FOB R'dam, whilst CFR China was assessed at US$1600/mt. With freight of US$350-400/mt between Europe and China, cargoes could be landed in the low US$1600s, traders said. With China inventories now considered balanced-to-tight and China a traditional importer from Europe, European cargoes were now heading to Asia. Around 15,000 mt were expected to arrive in Asia from Europe, with another 15,000 mt also headed from the US. The same source said another 5,000 mt could be fixed in October. However the return from maintenance of some units in Asia could cap further increases there at $1,700/mt CFR China, sources said.