China Petroleum and Chemical Corp, or Sinopec, has slashed its ex-works prices for butadiene by 16% effective late Monday, its second cut this month, end-users said Tuesday.
With the latest reduction, Sinopec's subsidiaries in East, North and South China are offering butadiene at Yuan 7,000/mt, or about $952/mt on an import parity basis, down Yuan 1,300/mt from Yuan 8,300/mt.
The previous price revision took place on July 2, when the state-owned company cut prices by Yuan 500/mt, or 6%, to Yuan 8,300/mt.
High synthetic rubber stocks, poor demand, oversupply and weaker prices for imported cargoes have put downward pressure on prices.
The weak situation is expected to worsen as new domestic butadiene extraction units are scheduled to begin production about mid-July.
Among them are Wuhan Petrochemical, a subsidiary of Sinopec, which plans to start up a new naphtha-fed steam cracker at Hubei province, on July 15.
Wuhan's steam cracker will be able to deliver up to 800,000 mt/year of ethylene and provide crude C4 feedstock to a butadiene extraction unit with a design capacity of 120,000 mt/year. The unit is expected to begin operations on July 19.
Another startup will be by PetroChina, which plans to operate a new petrochemical complex at Chengdu, Sichuan province, in mid-July, with a 150,000 mt/year butadiene extraction unit.
Synthetic rubber stocks in warehouses at Qingdao, China's eastern Shandong province, stood at 54,900 mt on June 28, down 3% from 56,400 mt on June 14, data from the Qingdao International Rubber Exchange showed.
On Monday, the CFR China benchmark for butadiene stood at $970/mt, down $175/mt, or 15%, week on week, Platts data showed.
