SINGAPORE (ICIS)–Asia butadiene (BD) spot prices may peak soon as buyers and China-based traders seek to procure spot cargoes before they wind down their activities in the run-up to the week-long holidays in early October, market sources said on Friday.
Discussions were heard this week in a wide range at $1,550-1,640/tonne CFR (cost and freight) northeast (NE) Asia.
“There is a lot of discussions and trading activities this week as market activities will taper off before the holiday,” a trader said.
The Chinese market will be shut from 1-8 October for the National Day holidays.
A sales tender for an October loading of 2,000 tonne BD cargo issued by Lotte Chemical Titan of Malaysia attracted strong bids this week, market sources said.
BD spot prices have been on a relentless surge, up by $550/tonne or about 58% since the end of July to $1,500/tonne CFR NE Asia in the week ended 8 September, ICIS data showed.
Tight supply and strong Chinese demand due to re-stocking activities ahead of the October holidays had fuelled the BD price upsurge.
However, market activities are expected to start to taper off soon as all the available regional spot cargoes for October shipments are expected to be fully placed in the near future.
Meanwhile, several deep-sea parcels from Europe and the US are also scheduled to arrive in Asia in October.
“There may still be room for the price to go up higher in the coming week or so, but the market will taper off when all the October cargoes have been fully placed,” a supplier added.