Reduced Supplies Push Up Butadiene Prices in the European Market Hamburg, (Germany): Across the European market, Butadiene prices have turned bullish in the third week of July. Limited availability amid speculated supply cuts by major producers has been mainly blamed for the recent firmness, although there are few shutdowns or reduced rates confirmed by the regional producer. Furthermore, firmer feedstock values have further exerted upward pressure on the prices of Butadiene. However, demand for Butadiene from the downstream derivative industry continues to remain weak owing to a seasonal lull. Prices of Butadiene have witnessed an increment of USD 22/MT on a weekly basis in the German market driven by rising domestic costs and reduced supply from key sources, particularly during the heavy Q2 turnaround season. Recently, the rally in freight costs has also supported high offers for imports. However, demand for Butadiene from the downstream Synthetic rubber and Polymer industry has remained sluggish, with converters limiting their purchasing volumes given poor end-product demand. Even though some players have reported a cautious pickup in buying interest during June, overall domestic demand has remained tepid in the domestic market. On the raw material front, the cost support from feedstock Naphtha was sufficient on Butadiene as its prices settled on the higher end in the last few weeks, supporting the prices to follow an uptrend in the domestic market. Furthermore, the domestic operating rates have remained under pressure as demand from the downstream industry has not fully improved. Moreover, the maintenance of leading manufacturers notably SABIC, and Gelen in the Netherlands has directly affected the reduction of market supply. At the same time, imports from the Asian market have also been reduced on the German domestic market amid the Red Sea crisis which lengthened the lead times and caused delivery delays. Escalating freight rates has added to cost support, providing sellers with strong leverage to maintain their firm stance. Further, global container indexes also showed a positive price revision recently, affecting prices of multiple commodities in the global market. Thus, prices of Butadiene FD Hamburg were settled at USD 1126/MT during the week ending 19th July 2024. Furthermore, market players anticipate shipping costs are expected to remain firm in the near term amidst the convergence of peak seasonal demand. Looking ahead, ChemAnalyst anticipates prices of Butadiene might remain strong across the European market. Firmer month-on-month feedstock Naphtha values which is likely to drive discussion for the August contract reference price settlement. Furthermore, the demand for Butadiene from the downstream Synthetic rubber and Polymer industry is expected to improve but at a steady pace. Moreover, the supply of Butadiene is expected to remain tight in the projection of slow imports and weak domestic operating rates which might keep the prices elevated in the regional market. https://www.chemanalyst.com/NewsAndDeals/NewsDetails/reduced-supplies-push-up-butadiene-prices-in-the-european-market-29234