CHEMICALS H2 2025: Global butadiene seen bearish on ample, growing supplies

The global butadiene outlook is pessimistic for the second half of 2025, with sources saying the market is dragged down by heavy supplies in line with rising production after the refinery turnaround season and new plant startups.

Traders are continuing to look at moving cargoes to Asia from Europe and the US, where prices are poised to remain at their highest level. Chinese customs data shows butadiene imports from Europe, the Middle East and the Americas grew 74% year over year through June to 118,442 mt.

Even as prices slipped worldwide this year, an open arbitrage window incentivized the push of European cargoes to Asia, as did a supply bump amid the restart of TotalEnergies' Gonfreville butadiene unit and the end of outages at Dow's Bohlen site. Platts calculated the spread between FOB Rotterdam and CFR China butadiene at $270.50/mt in H1 2025, below previous figures but still a healthy margin.

China received 42,001 mt of butadiene from Europe in the first six months of the year, up 186% from a year earlier, according to customs data.

New supply, demand slip to impact Asian prices

Prices in Asia will likely remain the highest globally, but deepsea margins will likely narrow as startups of new butadiene plants in Asia pressure prices.

PT Lotte Chemical Indonesia started its new naphtha-fed steam cracker in late May. The steam cracker supports a 140,000 mt/year butadiene plant, and the company started supplying butadiene in July. And ExxonMobil announced the startup of its ethylene project in Huizhou, southern China in July.

Other plants are scheduled to come back online after the turnaround season. China's Zhejiang Petrochemical plans to restart its No. 3 naphtha-fed steam cracker in Zhejiang in early August after completing planned maintenance. The cracker, shut in late June, supports a 250,000 mt/year butadiene unit.

Weak demand for tire production, notably in China, is also poised to pressure Asia's butadiene market. China's tire exports to Europe will likely slow amid an anti-dumping investigation launched by the EU on May 21, which is expected to last for 14 months.

Sources said the butadiene-naphtha price spread will likely narrow in line with a weaker Asian butadiene market. Platts calculated the spread between CFR China butadiene and CFR Japan naphtha at $641.17/mt in H1 2025, and Anthony Tso, Asia-Pacific associate director of C4s and elastomer at S&P Global Energy, said the spread is forecast to narrow to the $400s/mt in H2 2025.

Low overseas prices, tariffs limiting US flows

US supply is seen growing in H2 2025 after the refinery turnaround season ends, with one US buyer saying they expect "at least two cargoes per quarter for the balance of the year."

However, the arbitrage has remained closed for most of the year from the US, and new export opportunities are expected to be limited as overseas butadiene prices remain relatively low. A source in the US said for producers to shift more material to exports, prices would have to drop below 30 cents/lb. The CIF USG butadiene price averaged 43.88 cents/lb in H1 2025, or $966.32/mt, down 15.7% from H2 2024, Platts data showed.

China, Taiwan and South Korea registered no imports from the US in May or June, according to customs data.

Some butadiene offers from the US were heard for August-arrival cargoes to China; however, Chinese end-users were reluctant to take cargoes amid US-China trade tensions.

A US trade source said despite China being the main Asian buyer of US butadiene, "with duties and further potential issues, nobody will take the risk to sell to them. I don't see much of a door being opened."

According to the White House, many Asian countries have agreed to new reciprocal tariff rates with the US, but no agreement has been reached between the US and China.