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In Europe reduced cracker operating rate to affect supplies of butadiene

November 04/2011

(ICIS) -- Steam cracker operating rate reductions are starting to affect supplies of butadiene (BD), counteracting weak domestic and export demand and stabilising spot values, market sources said on Friday. Due to cracker reductions, the supply of crude C4 [feedstock for butadiene] is under pressure, a major producer said. It is very difficult to find [crude C4] volumes, a second producer said.

European producers have been forced to cut cracker operating rates because of the very poor performance of key ethylene and propylene derivatives polyethylene (PE) and polypropylene (PP). Rates are reported around 70-75% on average, although some units are still running closer to 80%, depending largely on location and derivative portfolio.

Currently spot prices are being pegged at around ?1,600/tonne ($2,222/tonne) FD (free delivered) NWE (northwest Europe) on the domestic market and at $1,6001,700/tonne FOB (free on board) NWE on the export market. These from a peak in June-July at ?2,7003,300/tonne and close to $5,000/tonne respectively.

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