The Asia butadiene-naphtha spread rose US$7.25/mt day on day to US$824.88/mt last Friday, June 19, driven by a bullish butadiene market, Platts data showed.
The spread is the highest since March 14, 2013, when it was calculated at US$918/mt.
Last Friday, the FOB Korea butadiene benchmark rose US$10/mt day on day to be assessed at US$1,390/mt, while the CFR Japan naphtha price edged up US$2.75/mt to US$565.13/mt over the same period.
Asian butadiene prices have generally been on an uptrend since mid-May as end-users were actively seeking spot cargoes in South Korea and Taiwan amid the butadiene plant turnaround season.
In South Korea, Yeochun NCC had shut its 220,000 mt/year butadiene plant in Yeosu over May 13 to mid-June for annual maintenance.
In Taiwan, Formosa shut its No. 1 steam cracker in Mailiao June 9 for 40 days of annual maintenance.
The cracker is able to produce 109,000 mt/year of butadiene.
A market source said some of South Korea’s end-users were willing to pay US$1,400-1,450/mt on a CFR basis, much higher than the current price for the export market. But this could not be confirmed with the market.
“South Korean butadiene producers are reluctant to export butadiene now, as they are able to achieve higher prices in the domestic market,” said a trading source.
But some market sources said the spread would unlikely widen further as spot butadiene demand would fade amid negative downstream margins.
Butadiene’s key downstream market is synthetic rubber.
On Friday, the CFR Northeast Asia synthetic rubber price jumped US$50/mt week on week to be assessed at US$1,570/mt.
But the spread between rubber and butadiene was calculated at US$180/mt, much lower than the breakeven spread of US$550-600/mt.
Source: Platts