Market and product

US October butadiene (BD) contracts settled higher against the backdrop of limited availability amid ongoing outages and other cost pressures.

The ICIS Contract Reference Price settled at 31.5 cents/lb ($694/tonne) FOB (free on board) in the US Gulf, up 6 cents/lb from September.

Contracts were largely expected higher amid an ongoing outage at BASF Total's US Port Arthur, Texas, steam cracker. The cracker has been offline since June and is not expected to come back online until at least mid-October, according to market sources.

Because of the cracker's relatively heavy feedslate, the extended shutdown has curbed US BD and propylene supply to a greater extent than a typical cracker outage, pressuring prices.

LyondellBasell is also on sales allocation for BD following a cracker outage at its US Channelview, Texas, cracker, according to market sources.

The restart of numerous styrene butadiene rubber (SBR) plants following Hurricane Laura added to the pressure as plants ramped up to make up for lost inventories as a result of the storm.

About 45% of US SBR production capacity went down, while INVISTA shut its 480,000 tonnes/year Orange, Texas, adiponitrile site. INVISTA is the largest single consumer of BD in the US.

SBR producers were increasing their operating rates before the storm in an effort to build inventory ahead of hurricane season against the backdrop of recovering demand in the automotive sector.

The storm did not directly impact US BD production, with most plants restarting shortly after the storm passed. - ICIS-