Chinese butadiene prices fall to parity with Europe on coronavirus

New York — Chinese butadiene prices reached parity with European export prices Tuesday for the first time since late-2018, according to data from S&P Global Platts, because of the coronavirus outbreak.

The CFR China spot price fell $10 on the day to $750/mt, with the FOB Rotterdam spot price assessed flat on the day at the same level.

CFR China spot prices have fallen $210/mt since the start of February as the coronavirus outbreak contributed to a collapse in Asian demand. The CFR China spot price is now at the lowest since December 2015 according to Platts data.

The Chinese prices were at a $300/mt premium to European as recently as early-January.

The coronavirus outbreak has seen demand from downstream sectors including SBR and ABS slump, as supply chains were disrupted by quarantine measures and downstream sectors ran operations at reduced rates.

Supply in Asia has been overwhelming demand, with butadiene buyers heard attempting to resell cargoes and new Chinese capacity coming online.

In Europe, exporters have faced limited options following the collapse of the arbitrage to Asia. Market participants have been eying the US market where supply has been reduced following the TPC explosion late-November.

However, US prices have trended lower over the past weeks on weak demand and strong supply available from Europe. In addition, the collapse in Asian prices has caused some South Korean producers to look at the possibility of exporting material.

Platts assessed the US spot butadiene price CIF USG at 42 cents/lb ($926/mt) Friday.