Market and product

US butadiene (BD) August contracts settled higher, as cost pressures have mounted.

Nominations were split. One producer revised down its nomination.

The ICIS Contract Reference Price settled at 22.5 cents/lb ($496/tonne) free on board (FOB), up by 3 cents/lb from July.

June and July appear to have been the bottom for BD prices, with crude rebounding and holding steady just above $40/bbl.

August prices were widely expected to be higher, as BD producers faced significant cost pressures and it had not been economic to extract BD.

Europe settled up by €35/tonne from July.

Spot prices in Asia maintained an uptrend because of limited spot availability and negative margins from naphtha costs.

Surplus supply was cleared in July through exports to Asia, making spot availability snug, although demand remained weak.

Market players continue to gauge the pace of demand recovery. Buying interest has improved slightly, but this is likely more a function of restocking, as downstream operations ramp up.

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BD is a key feedstock for synthetic rubbers, primarily styrene butadiene rubber (SBR), which is used in tyre manufacturing. BD is extracted from crude C4s.

Major US BD producers include ExxonMobil, LyondellBasell, Shell Chemical and TPC Group. - ICIS-