TPC Group nominated its August US butadiene contract price down 26 cents/lb ($573/mt) to 40 cents/lb ($882/mt), sources said Friday.
Confirmation from TPC Group on the nomination was unavailable immediately.
Market expectations for the August US butadiene contract price has been for a drop of anywhere from 10 cents to 25 cents, but most sources were still surprised by the nomination.
Sources said part of the reason for the steep drop would be to stop arbitrage opportunities from Europe and Asia on butadiene as well as derivative styrene-butadiene rubber.
The US butadiene spot price was last assessed July 12 at an over-four-year low of 45 cents/lb CIF USG, with pricing heard Friday in the high 30s-40 cents/lb CIF USG. US spot prices have tumbled 31 cents since being assessed at 76 cents/lb CIF USG May 24, according to Platts data.
The last time the spot butadiene price was at this level was June 19, 2009 when it was assessed at 41.50 cents/lb CIF USG, according to Platts data.
The other three producers — ExxonMobil, LyondellBasell and Shell Chemical — had yet to nominate for August contracts, sources said.
The July US butadiene contract price settled down 8 cents/lb from June to a 66-73 cents/lb split settlement, with ExxonMobil settling at 73 cents/lb, while Shell Chemical, LyondellBasell and TPC Group settling at 66 cents/lb, sources said.
Source: platts.com
