SunSirs: Weighed Down by Supply and Demand Factors and Weakening Costs, the 1,3-Butadiene Market Was Trending Downward

In early May 2026, the domestic 1,3-butadiene market experienced a weak downward trend; the overall trading atmosphere was sluggish, characterized by diminishing cost support, relatively ample supply, and subdued downstream demand. Bearish sentiment prevailed within the market, leading suppliers to continuously soften their price quotes, while downstream buyers exercised caution and sought to drive prices down. Market transactions consisted primarily of small-volume purchases driven by immediate necessities; compounded by lackluster trading activity in auctioned supplies, the market faced significant overall downward pressure. According to data from SunSirs' commodity market analysis system, from May 1 to May 11, 2026, domestic 1,3-butadiene prices declined from 13,200 RMB/ton to 12,466.67 RMB/ton—a cumulative drop of 5.56%—indicating that the market is currently situated within a weak, downward adjustment channel in the short term.

Cost Perspective: During the current period, cost support for 1,3-butadiene has been relatively weak, with upstream energy commodities providing insufficient impetus to spot market trends. As a byproduct of the cracking process, 1,3-butadiene’s market trajectory is highly correlated with international crude oil and naphtha prices. Although international crude oil experienced intermittent rebounds during this period, the upward momentum lacked staying power; similarly, naphtha’s upside potential remained limited, resulting in a state of overall weak fluctuation across the refining and petrochemical feedstock sector. Concurrently, profit margins throughout the chemical industry chain remain ample, and cracking units at refining enterprises are operating smoothly. Consequently, feedstock costs are providing insufficient underlying support for 1,3-butadiene prices—failing to effectively offset the bearish pressures stemming from market supply-and-demand dynamics. As of May 8, the settlement price for the July contract of US WTI crude oil futures stood at $95.42 per barrel, while the settlement price for the July contract of Brent crude oil futures was $101.29 per barrel.

Supply Side: During the first ten days of the month, the supply landscape of the domestic 1,3-butadiene market was generally ample, with persistent pressure from the abundance of available stock. Recently, domestic 1,3-butadiene production facilities have undergone alternating cycles of scheduled maintenance and restarts; consequently, plant operations have experienced frequent fluctuations, and the industry's overall operating rate has remained at a moderate level. Concurrently, the smooth arrival of certain imported shipments at ports has further bolstered the volume of 1,3-butadiene circulating in the domestic spot market. Performance in market auctions has been dismal, with the majority of auctioned lots failing to find buyers; in an effort to stimulate sales, producers have proactively lowered their price quotes. The spot market remains well-supplied with circulating inventory, showing no discernible signs of depletion.

Dongming Petrochemical's 50,000-ton/year 1,3-butadiene unit is operating normally; 336 tons are available for external sale, with a floor price of 12,200 RMB/ton.

Satellite Chemical's 90,000-ton/year 1,3-butadiene unit is operating normally; 336 tons are available for external sale, with a starting bid of 12,300 RMB/ton.

Demand Side: In the current period, downstream demand for 1,3-butadiene has remained sluggish, lacking the positive impetus typically provided by concentrated inventory restocking. Operating rates within downstream derivative sectors—such as synthetic rubber and latex—remain low. Furthermore, order volumes in end-use industries, including tires and general rubber products, are lackluster; the pace of finished product shipments is slow, placing significant pressure on enterprises to deplete their existing inventories. Downstream manufacturers are generally adhering to a strictly "on-demand" procurement strategy, exhibiting weak willingness to purchase and engaging in noticeable price-bargaining behaviors. They harbor strong resistance toward high-priced raw materials, resulting in a disruption of price transmission along the industrial chain and making it difficult to pass positive procurement signals upstream. The broader chemical market is characterized by a strong wait-and-see sentiment, with no signs of concentrated inventory restocking, which has further weighed down demand performance in the 1,3-butadiene market. As of May 11, the market for BR in the East China region was undergoing narrow consolidation. With international crude oil prices fluctuating at high levels, the quoted supply prices for BR have remained temporarily stable, though spot market traders have made minor adjustments to their offers. Currently, quotes for BR from major producers—such as Daqing, Yangzi, and Qilu—range between 15,700 and 15,850 RMB per ton, while quotes for certain private-label brands hover around 15,600 to 15,750 RMB per ton.

Market Outlook:

Based on a comprehensive fundamental analysis, the domestic 1,3-butadiene market is expected to maintain a pattern of range-bound consolidation in the short term. On the supply side, uncertainties regarding plant maintenance shutdowns persist; however, expectations of tightening supply in the near future are providing a certain level of price support. Conversely, downstream demand is unlikely to recover rapidly in the short term, and prevailing market pessimism is unlikely to dissipate quickly, resulting in significant resistance to any upward price movement. Going forward, key factors to monitor include crude oil price fluctuations, the progress of domestic plant maintenance, actual trading volumes within the market, and the indirect impact of geopolitical developments in the Middle East.

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