Expectations of a decrease in butadiene imports due to a decrease in demand in Europe and America
2023/8/31
From the perspective of butadiene import trend from 2020 to 2023, the total import volume in 2020 was 455300 tons, which is the highest level since 2007. Subsequently, from 2021 to 2022, the import volume rapidly decreased, reaching a low level since 2009 at 170300 tons for the entire year. In the second quarter of 2023, due to the impact of low external market prices, the import volume of butadiene increased month by month. The import volume in July was 55900 tons, reaching the highest level since August 2020 (59400 tons).
As is well known, in recent years, the production capacity of China's butadiene industry has rapidly expanded, the self-sufficiency rate of products has gradually increased, and the industry's supply and demand pattern has gradually shifted towards oversupply. However, the monthly import volume of butadiene has once again exceeded the high level of 50000 tons, and the flow of goods in international trade activities is mainly controlled by prices.
Corresponding to the high import volume from June to August 2020 and July 2023, there have been two lows in the market since 2020 to 2023. Firstly, starting from March 2020, the impact of the epidemic has spread in Europe and America, resulting in almost stagnant industrial terminal demand and dragging down the price of butadiene. The CFR price in China dropped to around $350/ton from April to May, while the supply pressure in the European market was high. Due to the need for export arbitrage windows, the FOB Rotterdam price briefly dropped to $50/ton. Secondly, in mid to late June 2023, CFR China was around $650 per ton, and demand in Europe and America decreased, with FOB Rotterdam prices dropping to around $280 per ton.
From the distribution of butadiene import sources from January to July, Southeast Asia and Northeast Asia are still the main sources of butadiene import, but the proportion of Middle Eastern sources such as Oman and Iran is as high as 20.31%; The proportion of imports from the United States, Brazil and other regions in the Americas is 8.21%, while the proportion of European sources such as Germany and the Netherlands is 7.02%.
The impact of ocean freight from the Middle East, Europe and America on the Asian market is relatively evident. In August, with the rise of crude oil prices, there were reports in the external market that some cracking units were forced to lower their prices due to cost pressures, which led to an increase in merchant offers for future sources of goods. With the gradual narrowing of the price difference between domestic and foreign markets in China, it is expected that there will be a decrease in import volume in October. However, from a global market perspective, there is currently no new demand concentration, and the import and export flow of butadiene in the later stage still needs to be carefully monitored.
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