The market supply and demand are sufficient, and the adipic acid market remains stable.

On July 6, Sinopec East China Sales Company increased the butadiene supply price to Yangzi Petrochemical, Shanghai Petrochemical and Zhenhai Refining and Chemical by 200 yuan/ton to 8,200 yuan/ton. This is the third increase in less than a month, with a cumulative increase of 700 yuan/ton, or 9.3%. Since June, domestic butadiene has experienced a round of general price increases, with increases in North China and East China ranging from 250-700 yuan/ton. East China has led the increase due to continued tight supply of supplies.

Compared with the beginning of the year, domestic butadiene prices have increased by nearly 40%. The industry predicts that the tight supply of butadiene may intensify in the third quarter. The main reason is that the G20 Summit will be held. Major domestic butadiene refineries such as Shanghai Petrochemical and Zhenhai Refining and Chemical will reduce their operations by 40% from August 24 to September 6. -50% capacity. At the same time, hazardous chemical vehicles and terminals have stopped operating in some areas of Zhejiang, hindering transportation. In addition, the depreciation of the RMB has pushed up butadiene import prices, limiting the supply of overseas supplies.

Qixiang Tengda has a 150,000-ton butadiene production unit, which has greater performance flexibility to benefit from product price increases. It also has a production capacity of 190,000 tons of methyl ethyl ketone, accounting for nearly half of the domestic share. The 2015 semi-annual report shows that this business accounted for nearly 50% of the company’s main operating profit. At the same time, its 350,000 tons of MTBE and 200,000 tons of isooctane production capacity under construction will benefit from the oil product upgrade policy. In addition, the company has entered the energy purification industry chain by acquiring 99% of Qilu Keli’s equity, and has expanded its business layout such as sulfur recovery and coal chemical catalysts.

Domestic butadiene prices are expected to rise steadily in the third quarter, and butadiene refineries will benefit.