Tighter supplies lift BD premium for Thailand’s PTTGC

Thailand's state-controlled refiner PTTGC has sold prompt butadiene (BD) at a historical high, since starting production of the synthetic rubber feedstock at its Mab Ta Phut plant in 2014, because of tighter regional supplies and a series of plant disruptions in South Korea and Japan.

The 2,000t BD cargo for 11-15 December loading sold at a premium of $80-90/t against cfr northeast Asia assessments on a fob basis. Freight to Taiwan and South Korea is estimated at $95/t and $120/t, giving a cfr equivalent of $175-210/t.

BD supplies have been gradually tightening since July-August as cracker operators have been co-cracking their crude C4 streams in response to lower prices. An early November disruption at South Korea's LG Chem Yosu plant that is estimated to last three months sparked a scramble for BD, as the company is keen on continuing production at a downstream 900,000 t/yr acrylonitrile butadiene styrene unit.

Japanese refiner Eneos said last week that it will be shutting down its Kawasaki cracker for repairs that will last 4-5 weeks from 1 December. The naphtha cracker also feeds a downstream 110,000 t/yr BD unit, which will also need to be shut. This exacerbated the regional supply tightness as the unit feeds various downstream synthetic rubber units.

But the tightness is expected to ease during next year's first quarter as there will be incremental supplies from new and existing capacity being brought back into production in China, South Korea, Malaysia, the Philippines and Thailand. Thailand's Bangkok Synthetics last week started commissioning its 80,000 t/yr BD extraction unit at Mab Ta Phut and expects on-specification production over the next few weeks. New and existing capacity in the other countries that are expected to be brought on stream before March exceeds 800,000 t/yr, according to data compiled by Argus.

By Bohan Loh

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