Butadiene: Sudden impact on upstream devices, short-term market volatility

Butadiene: Sudden impact on upstream devices, short-term market volatility

December 7, Nanjing, Jiangsu. A unit of Yangzi Petrochemical's olefin plant caught fire. The local fire report said that around 13:08, the 1# ethylene cracking furnace BA-106 of Yangzi Petrochemical Olefin Plant caught fire. After receiving the alarm, the firefighters rushed to the scene for rescue. Subsequently, Yangzi Petrochemical released the follow-up to the accident: the 1# ethylene plant has been shut down, and there is no abnormality in the monitoring of the four points in the up and down wind direction around the site (the black smoke generated in the early stage of the accident has a certain short-term impact on the surrounding area of the plant). The 1# 60,000 tons/year butadiene plant was temporarily shut down on December 8, and the restart date is to be determined.

The sudden news on the supply side has obviously boosted the sentiment of the butadiene market, and with the increase in the supply price, the spot offer has gradually increased.

It is understood that starting from November, Zhejiang Petrochemical's 1# and 2# units will be overhauled in turn, Lianyungang Petrochemical's unit will be reduced, and Fujian United's 120,000-ton/year unit will be overhauled. The capacity utilization rate of the diene industry has gradually dropped from above 70% to below 65%.

On the supply side, the sudden shutdown of individual devices has significantly boosted the mentality of merchants, but it is relatively short-lived. With the start-up of the 200,000-ton/year butadiene plant of Shenghong Refining and Chemical Co., Ltd., the supply is expected to increase significantly in the later period. However, the demand continues to be weak, and the downstream market is not good recently, and the demand is still suppressed in the face of the butadiene market.

On the whole, the second phase may run in shock in the short term, and we still need to pay attention to the release of new production capacity and changes in downstream demand in the later stage.