SINGAPORE (ICIS)–Asia’s butadiene (BD) prices are likely to remain flat-to-soft in the week of 1 February on waning demand as players leave for the Lunar New Year holidays in the week, market sources said on Tuesday.
“Demand is weak this month due to the Lunar New Year holidays,” a Taiwanese buyer said.
The key Chinese market will be shut 7-13 February, while other countries, including South Korea, Taiwan, Singapore, Malaysia and Indonesia, also celebrate the holidays and shut from one to three days for the festive holidays.
As such, market activities have started to wind down this week as players either adopt a wait-and-see stance or have started to leave for the holidays, market sources said.
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“South Korean players may start to go off on Friday for the Lunar New Year holidays, so there may not be much activities this week,” a South Korean trader said.
“We expect the market to remain calm this week as players in Asia are now preparing to go off for the Lunar New Year holidays,” a South Korean producer said.
Spot prices have remained flat at $760-800/tonne CFR (cost & freight) NE (northeast) Asia since 8 January, ICIS data showed.
However, market sources said that poor downstream prices, crude oil volatility and a slowing Chinese economy have dampened buying sentiment, and BD prices could soften in the near term.
“It is possible BD prices may also start to soften as buying interest weakens due to the uncertain market outlook and poor downstream synthetic rubber prices,” a Japanese trader said.
“End-users cannot afford to pay above $800/tonne CFR NE Asia for BD as the downstream synthetic rubber prices are very weak and it is difficult to push up the synthetic rubber prices due to the current uncertain market outlook,” a downstream synthetic rubber producer said.
