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US butadiene producer nominated a 7 cent/lb increase for January

December 23/2011

(ICIS) -- A US butadiene (BD) producer on Thursday nominated a 7 cent/lb (USD154/tonne, EUR119/tonne) increase for January, an initiative that puts its BD contracts at USD1.05/lb next month. The proposed increase comes as BD prices in other regions are showing signs of strengthening. The European BD contract price for January was agreed on Thursday at EUR1,700/tonne (USD2,208/tonne), rising by EUR50/tonne from December.

The increase in Europe followed expectations of improved demand amid supply constraints because of ongoing ethylene-driven cracker reductions. The outcome of the January settlement in the US will depend on nominations by three other producers in the coming days.

The potential increase next month could snap a four-month downtrend in the US BD market, during which contracts fell by 44% because of weaker demand and ample supply.
Most US BD contracts in December settled at 98 cents/lb, down from USD1.75/lb in August.

Despite the sharp decline, market sources have predicted a possible rebound for BD in 2012, citing potential new demand in the tyre sector.

BD prices could also gain support from possible supply constraints, resulting from a series of cracker turnarounds in the US scheduled for the first half of 2012.

US BD producers include ExxonMobil, INEOS, LyondellBasell, Shell and TPC Group.

Author:Marina Ivanova
Tags:Dow, Exxon Mobil, Ineos Polyolefins, LyondellBasell, Shell.
Category:General News
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