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European spot butadiene prices are rocketing because of strong demand

April 04/2011

(ICIS) -- European spot butadiene (BD) prices are rocketing because of strong demand in an extremely tight global marketplace, market sources said on Friday. Spot export prices were being pegged from EUR 2.000/t (USD 2.857/t) to as much as EUR 2.200/t FOB (free on board) ARA (Amsterdam, Rotterdam, Antwerp), well above the April monthly contract price (MCP) settlement of EUR 1.690/t FD (free delivered) NWE (northwest Europe).


Three European BD producers said that despite traders offering these prices, low inventory levels and strong incremental demand from domestic contract consumers meant that free volumes were virtually non-existent.


Technical problems at two sites in Germany are impacting on a market that is already very snug because of a planned maintenance shutdown at an extraction unit in the Netherlands and constraints on BD feedstock crude C4 output due to cracker turnarounds and light feed cracking.


Domestic European consumers are attempting to maximise their contract volumes from some suppliers to manage the shortfalls resulting from the unplanned issues at other suppliers. However, a consumer said: УSo far we are still able to find volumes, it's tough, but we find volumes. We are missing only a small part of our regular tonnes."


Additionally, export demand from the US is very strong. Already a net importer of crude C4 and BD, it has been heaviliy impacted by the loss of supply from Europe and Libya - an important crude C4 exporter.


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