VINACHEM

The spread between China and Southeast Asia butadiene prices widened to a two-month high level as tight butadienesupply in SE Asia eased amid weak downstream rubber demand, despite a series of steam cracker shutdowns, market sources said March 21.

ThePlatts-assessed CFR China butadiene price fell $10/mt week over week to $1,340/mt onMarch 21, while Platts assessed CFR Southeast Asia butadiene $50/mt lower over the same periodat $1,250/mt. The price spread between China and Southeast Asia was calculated at a two-month high of $90/mt on March 21, compared to $50/mt a week earlier, according to data from Platts, part of S&P Global Commodity Insights.

In the week ended March 21, some spot butadiene cargoes started to emerge in SE Asia as traders had excess spot availability, market sources said. AJapanesetrader said some end-users in SE Asia were not able to take previously fixed supply volumes amid their high inventories, which were triggered by weak downstream demand, such as for latex, notably in Malaysia.

Typically, CFR Southeast Asia butadiene is $100/mt lower than CFR Northeast Asia, reflecting the SE Asia to NE Asia trade flow and the freight cost that makes such a move economically viable. This spread hadbeen narrowing in recent weeks amid limited supply in SE Asia following a series of naphtha-fed steam cracker shutdowns on the back of negative olefins margins, according to market sources.

Following the shutdowns, spot butadiene offers from Southeast Asia dried up, consequently narrowing the NE Asia/SE Asia location spread. Platts data showed that the spread level slid to $50/mt on March 7, the lowest level since May 17, 2024, when it was calculated at $30/mt.

Three naphtha-fed steam crackers are currently shut due to negative margins, according to company sources. In Malaysia, Lotte Chemical Titan shut its No. 1 naphtha-fed steam cracker in Pasir Gudang on Dec. 15, 2024, due to negative margins. The company lowered the operating rate of its 100,000 mt/year butadiene plant at the same site to 50%-60% of capacity, Platts reported earlier.

In the Philippines, JG Summit also shut its sole naphtha-fed steam cracker at the end of December 2024. The cracker supports a70,000 mt/year butadiene plant, Platts reported earlier.

Long Son Petrochemicals also shut its new steam cracker in Vietnam mid-October, 2024, the company said. The cracker is able to produce 113,000 mt/year of butadiene.

According to the latest customs data, China's butadiene imports from SE Asia in February stood at 12,935 mt, down 2.4% from a month earlier, while South Korea's butadiene imports from Southeast Asia fell 70% over the same period to 2,950 mt.

According to the latest data by the Korea Customs Service, South Korea's latex exports in February fell 21.4% from a month earlier to 57,352 mt. Of the total, South Korea's latex exports to Malaysia was 30,275 mt in February, down 26% from a month earlier, the data showed.  – Source: Platts