Weak downstream demand, cracker rationalization, co-cracking, tariffs and subdued recovery expectations are painting a bleak picture for the butadiene market in 2026 across various regions. Despite a recent push for self-sufficiency in China and the rest of Asia, market sources expect butadiene imports from the West to remain a fixture in the region for the foreseeable future.

Overall, worldwide butadiene prices trended lower in 2025. Platts, part of S&P Global Energy, assessed CFR China, CIF US Gulf Coast and FOB Rotterdam butadiene prices down $470-$530/metric ton from January to early December.

This trend resulted from two factors. First, macroeconomic woes have had a profound impact on the automotive and construction sectors, two of the strongest downstream consumers, resulting in a decline in butadiene consumption in Western domestic markets.

Second, cargoes have been sent overseas more aggressively, as Asian demand and a prevailing price premium made this region the most feasible for absorbing steady butadiene supplies from the US and Europe. From January to October 2025, China's butadiene imports alone stood at 428,721 mt, up 39% from a year earlier, according to customs data.

“These are easy times for buyers in China as it is the only domestic market which is doing well,” a European producer said. “They can push down pricing as low as they want.”

West to East trade flows are expected to continue for several years. Rising production capabilities across Asia have increased its self-sufficiency in markets like polypropylene and China recently shifted from a net importer of polybutadiene rubber to a net exporter, according to January-October 2025 customs data. However, butadiene self-sufficiency, although ever closer, is still far off.

“Asia, and especially China, will be a net importer for 2026,” said Bernd Helbing, analyst director of global C4s and derivatives at S&P Global Energy CERA. Although he said Western imports were likely to be lower in 2026 compared with 2025, Helbing added that “China is only expected to achieve self-sufficiency around 2030.”

Nevertheless, Asia’s doors are already tightening to Western imports. Asian market sources said supply from Europe would likely slow down early in 2026, as the location spread is seen narrowing. Supplies from the US to China would also be limited due to an additional 10% tax on US products. While American cargoes have shifted to other Asian destinations, such as South Korea, buying appetite is not as hearty as in China.

The European industry is set to see two more cracker shutdowns in 2026. Closures of Dow’s Bolhen cracker and Total’s Antwerp cracker have also been announced to take place by the fourth quarter of 2027. Ineos’ new cracker at Antwerp, slated for opening in 2026, will use ethane for feedstock instead of naphtha.

The overall change in European cracker feed slate and capacity will result in a decreasing share of crude C4 output from crackers, which should help reduce supply length and keep the market more balanced, market sources said.