China Petroleum and Chemical Corp, or Sinopec, has slashed its ex-works butadiene prices in East and South China by Yuan 1,000/mt ($163/mt) to Yuan 8,500/mt Friday, a Sinopec company source confirmed Tuesday.
"I think the main reason [for the price cut] is the downstream market is too weak," the source said.
One market source said Tuesday that Sinopec is facing high inventory levels.
The Sinopec company source said any inventory buildup depends on operation rates but could not provide further details at time of press.
The move follows a cut of Yuan 600/mt on March 3 to Yuan 9,500/mt for East and North China, and by Yuan 900/mt to Yuan 9,500/mt for South China.
It is not the first time that Sinopec has slashed its butadiene prices to such an extent, said one market source.
"Last year, they also cut prices like this ... Even [by] Yuan 4000/mt in one week."
Northeast Asian butadiene spot prices are on a downward trend due to high inventories, causing producers to shift excess product to the US, sources said.
At 0830 GMT close of Asian trade Monday, Platts assessed CFR China and FOB South Korea prices at $1,315/mt, down $95/mt on day. This marked a near-six month low since September 12 when the prices were assessed at $1,270/mt and $1,250/mt respectively.
Previously, the market had remained above $1,400/mt since late November, Platts data shows.
