1,3-Butadiene

Market Intelligence Report on Butadiene – Recent Commodity Market Dynamics

I. Price Trends
- Recent Price Volatility:
- On July 7, 2026, the reference price of butadiene stood at RMB 8,486.67 per metric ton, down 4.29% from RMB 8,866.67/ton on July 1.
- On July 6, 2026, the reference price was RMB 8,600.00/ton, down 3.01% from July 1.
- On July 3, 2026, the reference price was RMB 8,533.33/ton, down 3.76% from July 1.
- On July 2, 2026, the reference price was RMB 8,633.33/ton, down 2.63% from July 1.
- From June 30 to July 1, 2026, the butadiene price remained stable at RMB 8,866.67/ton, yet declined sharply by 24.86% compared to RMB 11,800.00/ton on June 1, 2026.

- Historical Price Comparison:
- On July 8, 2025, the benchmark price of butadiene was RMB 8,600.00/ton—down 5.15% from RMB 9,066.67/ton at the beginning of July 2025—and marked a yearly low.
- The annual average butadiene price in 2025 was RMB 11,401.62/ton, with a median of RMB 10,912.50/ton; current prices are significantly below both averages.

II. Supply-Demand Dynamics
- Supply Side:
- In 2026, China is set to commission four new butadiene production facilities, with a combined planned capacity of 620,000 tons/year. However, several units are scheduled for year-end commissioning, limiting actual output contribution in the near term.
- Total domestic butadiene production in 2026 is projected at 5.86 million tons, supplemented by ~320,000 tons of imports, resulting in an aggregate supply of 6.18 million tons.

- Demand Side:
- Downstream industries—including SBS (styrene-butadiene-styrene block copolymer), cis-polybutadiene rubber (BR), styrene-butadiene rubber (SBR), ABS resin, and styrene-butadiene latex—are planning capacity expansions, collectively expected to increase butadiene consumption by 28,000 tons/year.
- Total butadiene consumption in key sectors—including synthetic rubber (latex), ABS, and adiponitrile—is forecast at 5.58 million tons in 2026; export volume is also expected to rise modestly year-on-year.

- Supply-Demand Balance:
- A surplus of approximately 270,000 tons is projected for 2026, indicating a structural oversupply trend.
- Monthly supply-demand gaps are anticipated to widen progressively, with inventory accumulation months outnumbering drawdown months.

III. Market Drivers
- Cost Support:
- Butadiene production costs are highly sensitive to crude oil prices. Recent weakness and volatility in international crude markets have exerted downward pressure on butadiene pricing.

- Downstream Industry Developments:
- Lightweighting trends in new-energy vehicles (NEVs) are boosting demand for ABS resin, thereby indirectly stimulating butadiene consumption.
- Expanding applications of solution styrene-butadiene rubber (SSBR) and rare-earth-catalyzed polybutadiene rubber—key high-performance tire materials—are raising purity requirements for butadiene, accelerating industry-wide upgrades in high-purity refining technologies.

- Policy Impacts:
- China’s “Dual Carbon” (carbon peak & carbon neutrality) goals are imposing stricter environmental and energy-efficiency standards on the butadiene sector, compelling enterprises to phase out high-energy-consumption units and adopt cleaner production practices.
- The newly enacted “Regulation on Safety Management of Hazardous Chemicals” and updated environmental emission standards are further raising industry entry barriers.

IV. Analysis and Outlook
- Short-Term Outlook:
- Prices are likely to remain under downward pressure in the near term due to increasing supply and slowing demand growth.
- Widening monthly supply-demand gaps and intensifying inventory accumulation may further suppress pricing.

- Medium-to-Long-Term Outlook:
- Sustained growth in NEV and high-performance tire markets will gradually elevate butadiene demand in advanced material applications.
- Industry technological upgrading and green transformation will expand the market for premium products such as high-purity butadiene, providing long-term price support.

V. Forecast
- Price Forecast:
- Short term (1–3 months): Butadiene prices are expected to fluctuate within RMB 8,000–9,000/ton, with a strong floor support level around RMB 8,100/ton.
- Medium to long term (6–12 months): As supply-demand structures adjust and high-end demand grows, prices may gradually recover to the RMB 9,000–10,000/ton range.

- Market Opportunities:
- Monitor capacity expansion dynamics along the downstream ABS resin and high-end tire value chains to capitalize on emerging butadiene demand opportunities.
- Invest in high-purity butadiene production technologies to meet stringent quality requirements from NEV and advanced manufacturing sectors.