Figure 1 butadiene market trend in 2020
Source: Longzhong information
As is known to all, the domestic butadiene market started a volatile upward path from July. In the second half of October, the market soared due to the comprehensive boost of Wuhan plant maintenance, the release of domestic new production capacity less than expected, and the capital intervention. In November, the market was pulled by the unexpected shutdown news of South Korea and Japan plants, and the market was on the rise for a long time.
With the butadiene market rising, the negative demand of downstream gradually accumulated. At the same time, the supply side of domestic and foreign markets were short, and the contradiction between supply and demand was prominent. The butadiene market repeatedly hit the 10000 yuan pass and failed. The recent five months' rise finally ended in December.
Figure 2 Comparison of operation rate of butadiene industry in 2019-2020
Source: Longzhong information
According to the statistics of Longzhong information, after the market rose in July, domestic oxidative dehydrogenation units were restarted in October. During this period, although Wuhan Petrochemical plant was shut down, Bora petrochemical plant was started in August, Quanzhou petrochemical plant was started in late September, China Science and technology refining plant was started in late October, Yantai Wanhua plant was started in November It is an indisputable fact that the operating rate of the industry is increasing month by month and the supply is increasing.
Figure 3 Comparison of operation rate of main downstream industries of butadiene in 2020
According to the survey on the operating rate of Longzhong information industry, in the second half of 2020, the rapid rise of butadiene market led to the loss of downstream profits. Since the fourth quarter, the operating rates of butadiene's main downstream SBR, Br and SBS industries have declined significantly. In November, the operating rate of cis-1,4-polybutadiene rubber industry was 68.76%, with a month on month decrease of 6.58%; that of styrene butadiene rubber industry was 65%, with a month on month decrease of 4.06%; that of SBS industry was 54.2%, with a month on month decrease of 6.39%.
In December, on the one hand, the Lotte plant in South Korea was restarted, on the other hand, the output of Yantai Wanhua and Shandong Huayu was gradually released; in the second half of the month, the Wuhan Petrochemical plant was restarted, and its 60000t / a new plant with capacity expansion was put into operation. However, under the drag of poor downstream profitability, it is difficult for the demand side to show signs of rapid improvement. Overall, market supply and demand continued to be weak. When the positive factors leading to the early rise of funds and equipment accidents gradually dissipate, the market decline is an inevitable trend.
