SunSirs: Supply Remains Abundant Throughout the Year; Volatility Persists as the 1.3-Butadiene Market Weakens and Seeks a Bottom

Since the start of 2026, the domestic 1.3-butadiene market has generally exhibited a pattern of retreating from high levels, fluctuating within a range, and a continuous downward shift in the price centre, with pronounced price volatility throughout the year. Driven by fundamentals such as the release of new production capacity, high operating rates of cracking units, and persistently ample overall supply, coupled with a slower-than-expected recovery in downstream demand and limited pass-through of cost fluctuations, the market has operated under overall pressure.

I. Price Trends for Key Products (SunSirs Benchmark Price, 24 April)

1.3-butadiene

On April 24, the benchmark price for butadiene, as reported by SunSirs, stood at RMB13,266.67 per ton—a decrease of 26.57% compared to the beginning of the month (RMB18,066.67 per ton).

Upstream raw material: Propylene

24 April benchmark price: 9,327.67 RMB/ton

Compared to 1 April (9,004.33 RMB/ton): +3.59%

Compared to 1 January (7,680.00 RMB/ton): +21.45%

Downstream core products:

1.3-butadiene rubber: 24 April  price 12,300.00 RMB/ton, down 2.35% from 1 April, down 12.68% from 1 January;

Styrene-1.3-butadiene rubber (SBR)  price on 24 April: 11,766.67 RMB/ton, down 1.83% from 1 April and down 9.71% from 1 January.

II. Review of Overall Price Fluctuations in 2026

At the start of the year, 1.3-butadiene opened at the upper end of the annual range, with prices remaining high due to prior cost support and phased essential demand. From February onwards, pressure from ample supply gradually emerged, and prices began a downward trend; in March, a slight rebound occurred driven by brief restocking by downstream sectors, narrowing the phase-based decline, but the rebound lacked momentum and was extremely short-lived; In April, pressure from ample supply returned, compounded by continued weak downstream purchasing, causing prices to fall once more. Overall, prices fluctuated downwards throughout the year, with the price centre of gravity continuing to shift lower. The market’s overall weak trend remained unchanged, with each rebound struggling to break through resistance levels, and the magnitude of declines significantly exceeding that of rebounds.

III. Supply Landscape: Continuous Capacity Expansion and Overall Abundant Supply Across the Cycle

The supply side has been the core bearish factor driving the 1.3-butadiene market throughout 2026. Domestic cracking unit operating rates have remained high throughout the year, with stable production of 1.3-butadiene as a by-product of naphtha cracking; new capacity commissioned earlier has gradually completed ramp-up, leading to a continuous expansion of the industry’s effective production capacity. Overall domestic output has increased steadily, and the supply of spot goods in the market has remained abundant.

With no large-scale plant maintenance or production cuts to provide a positive boost, the industry’s stable, routine output has kept the market in a state of long-term oversupply. Manufacturers continue to face significant pressure to offload inventory, whilst low-priced goods circulate continuously, persistently suppressing upward price momentum and forming the underlying basis for the year’s price weakness.

IV. Official Customs Import and Export Data for 2026

According to monthly statistics from the General Administration of Customs, domestic 1.3-butadiene imports in March 2026 stood at 38,200 tons, a slight month-on-month decline of 5.41% but a year-on-year increase of 12.36%; cumulative imports for the first quarter reached 114,500 tons, representing a year-on-year increase of 15.72%.

V. The Complete Logic of Price Transmission Between Upstream and Downstream Sectors

1. Cost Side: Rising Propylene Prices Lead to Marginal Failure of Cost Support

Upstream propylene prices have continued to rise throughout the year, pushing the cost base higher. In theory, this should provide bottom-line support for 1.3-butadiene. However, severe oversupply in the 1.3-butadiene market has completely overshadowed the positive cost impact. Consequently, the rise in raw material prices has failed to effectively pass through to the 1.3-butadiene segment, rendering cost support largely ineffective.

2. Downstream Demand: Lackluster Recovery, Persistently Weak Purchasing

The overall recovery in downstream synthetic rubber demand has fallen short of expectations, serving as a key contributing factor to the weak price trend. As core downstream products, 1.3-butadiene and styrene-1.3-butadiene rubber are primarily used in the tyre manufacturing sector. Whilst tyre production has remained stable this year, growth has been limited; the industry is driven primarily by essential demand, with no additional purchasing volume.

In the short term, 1.3-butadiene is expected to continue its weak, choppy trend with a slight downward trajectory. As the core issue of oversupply remains unresolved, and the overall market supply-demand dynamics have not seen any fundamental improvement, a weak, choppy trend as the market searches for a bottom will be the prevailing theme.

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