In May 2026, the domestic butadiene market as a whole showed a volatile downward trend, with the focus of the market continuously shifting downwards throughout the month. The trading atmosphere in the market was relatively weak, and the mentality of merchants was generally cautious. According to the monitoring of the commodity market analysis system of Shengyi Society, from May 1st to 28th, the domestic butadiene market price decreased from 13200 yuan/ton to 12066.67 yuan/ton, with a price drop of 8.59% during the period.
Cost aspect: The continuous weakening of butadiene cost support in May is one of the core driving factors for the downward trend in market prices. As a byproduct of ethylene cracking, the price trend of butadiene is highly correlated with international crude oil and naphtha. This month, international crude oil prices have fluctuated and weakened due to the cooling of geopolitical expectations in the Middle East. Naphtha has also been running weakly, putting overall pressure on refining raw materials and insufficient support for the bottom of butadiene. At the same time, the overall profit margin of the chemical industry chain is loose, domestic cracking units operate stably, and the transmission of raw material costs to butadiene is insufficient. As of mid May, the theoretical profit of the butadiene extraction process unit has decreased by 37% compared to the previous month, and the profit of the oxidative dehydrogenation unit has also fallen by about 43%. The cost side’s support for prices has further weakened, driving the butadiene market quotation to continue to loosen. As of May 27th, the settlement price of the July contract for WTI crude oil futures in the United States was $88.68 per barrel. The settlement price of Brent crude oil futures for the July contract is $94.29 per barrel.
Supply side:
In May, the overall operation of domestic butadiene plants was differentiated, and some production plants were under maintenance, resulting in a contraction of local supply of goods; At the same time, multiple sets of equipment have resumed production one after another, offsetting the reduction impact caused by maintenance. Overall, the market supply of goods remains loose, with sufficient supply of circulating goods. The pace of on-site shipments is relatively slow, and the transaction performance is lower than expected, resulting in a slow progress of inventory digestion for enterprises. In order to accelerate the flow of goods, the production and trade quotations are constantly loosening. Combined with the normal arrival of external imported goods into the port and market, further supplementing the domestic circulation market, the overall supply pressure of the industry has always been relatively high, which has significantly suppressed the market.
Demand side:
The overall demand for butadiene downstream in May was weak, becoming the main factor dragging down the market trend. The overall operating level of mainstream downstream industries such as synthetic rubber and latex is low, and the industry’s production enthusiasm is insufficient. The market atmosphere in the terminal rubber products and tire fields is flat, and the turnover speed of finished products has slowed down. Enterprises generally face inventory backlog problems. As a result, downstream manufacturers tend to adopt a conservative purchasing attitude and adhere to the on-demand procurement model. Their willingness to restock the market is low, and there is a strong demand for price reduction in raw material quotations. The overall transmission of the industrial chain is not smooth, and there is a strong wait-and-see sentiment in the market. There are few centralized stocking operations, and the demand side has been unable to provide effective support for the market.
As of May 27th, the market situation of Shunding rubber in East China has been weakly consolidated. International crude oil prices fluctuated narrowly, downstream inquiries were wait-and-see, and the supply price of Shunding rubber was lowered. Shunding rubber spot merchants’ offers were slightly lowered.
Market forecast:
Based on the current fundamentals, the domestic butadiene market will continue to operate in a volatile and weak pattern in the short term. The volatility of international crude oil prices makes it difficult for the cost side to quickly form strong support. Coupled with the lack of significant improvement in downstream demand, the market lacks confidence in long positions, and the upward space for prices is limited. However, with an increase in maintenance equipment in the industry next month, market supply is expected to gradually tighten, which will provide a certain bottom support for the market. With the gradual decline of raw material prices to low levels, the profitability of downstream industries is expected to be restored, and production and procurement willingness may steadily rebound. If the crude oil market stabilizes and recovers in the future, coupled with multiple benefits such as supply tightening and demand recovery, the domestic butadiene market is expected to gradually stop falling and stabilize, and usher in a fluctuating rebound trend in the medium term. Continuous attention should be paid to key factors such as international crude oil trends, equipment maintenance dynamics, downstream industry start-up and order changes, and port inventory changes in the future.
| http://www.polyvinylalcohols.com |