Analysis and Outlook of China’s Domestic Butadiene Market Before and After the 2026 Spring Festival

Introduction: In 2026, China’s domestic butadiene market has risen strongly, with mainstream prices reaching the highest level since the second half of 2025. After the price increase in February, the market experienced a slight pullback due to demand constraints. Although buying interest gradually weakened with the approach of the Spring Festival holiday, the butadiene market remained relatively firm supported by the supply side, and prices continued to edge higher after a mild correction. In the short term, both domestic and overseas markets remain strong, and the recovery of rigid demand after the holiday is expected to boost market participants’ bullish outlook for the post-holiday market.

1. Review of the Butadiene Market Before the Spring Festival

Figure 1. Comparison of Butadiene Price Trends (2025–2026) (RMB/ton)

Source: Longzhong Information

In 2026, the butadiene market showed a strong upward trend. Taking the Shandong market as an example, the price rose from a low of RMB 8,750/ton at the beginning of the year to a peak of RMB 11,050/ton in mid-to-late January, representing an increase of up to 26.27%. Although prices pulled back after the surge, they still remained above the five-year average.

In January, scattered plant maintenance and reduced operating rates led to a slight decline in domestic output, while inventories continued to decrease, providing some support to the market from the supply side. On the demand side, the price spread between upstream and downstream products, along with downstream operating rates, also contributed to market support. Driven by both futures and spot market trends in downstream sectors, the entire industrial chain strengthened simultaneously, once pushing prices up rapidly.

However, the sharp rise in butadiene prices put pressure on downstream profit margins, which in turn constrained demand and became the main reason for the slight pullback after the price surge. Nevertheless, from a supply perspective, the domestic butadiene market remains in a destocking cycle, with reduced imports and stable operating rates in major downstream industries providing strong fundamental support. Overall, the butadiene market continues to show a relatively firm trend.

II. Monthly Supply–Demand Balance of Butadiene Before and After the Spring Festival

Figure 2: Forecast of Monthly Supply–Demand Balance of Butadiene (2024–2026) (10,000 tons; RMB/ton)

Data source: Longzhong Information

Although February includes the Spring Festival holiday, end-user demand is unlikely to significantly boost upstream products in the industry chain, and butadiene consumption is expected to decline. However, on the supply side, due to decreased production and reduced imports, butadiene supply is also expected to decrease significantly. With both supply and demand expected to decline, the supply-demand gap may narrow to some extent, providing some support to the market. However, in March and April, downstream synthetic rubber and ABS plants have planned maintenance shutdowns, which is expected to widen the supply-demand gap and drag down butadiene prices.

III. Profit Analysis of Butadiene Before the Spring Festival

Figure 3. Comparison of butadiene process profits from 2025 to 2026 (RMB/ton)

Data source: Longzhong Information

Figure 4. Profit Trend of Butadiene Industry Chain from 2025 to 2026 (RMB/ton)

Data source: Longzhong Information

As a byproduct of ethylene cracking, the profitability of butadiene production units from C4 extraction will not have a decisive impact on the production plans of refining and chemical enterprises. However, the profitability of butadiene production from oxidative dehydrogenation will affect the start-up and shutdown of some smaller units. With butadiene prices continuing to rise in 2026, the profitability of oxidative dehydrogenation processes is expected to improve. As the restart of oxidative dehydrogenation units in East China draws near, it is anticipated that this will supplement market supply in smaller regions after the holiday.

From the perspective of supply chain profits, the rise and fall of butadiene prices determine the ups and downs of supply chain profits. However, due to the large fluctuations and strong performance of the butadiene market, supply chain profits are mostly concentrated in the upstream raw material end. The rise in butadiene prices in 2026 led to a rapid compression of downstream profits. Currently, the profits of the butadiene rubber, ABS, and SBS industries are all inverted, thus putting pressure on the demand side for further increases in butadiene prices.

IV. Post-Spring Festival Butadiene Trend Forecast

After the Spring Festival, although butadiene supply may increase slightly, demand is also expected to improve, and overall fundamentals are likely to remain relatively firm. Key points to watch:

1. Supply side:Planned maintenance is limited, and some oxidative dehydrogenation (ODH) units are expected to restart, leading to a slight increase in output. The price spread between domestic and overseas markets remains limited, and there are signs of reduced supply from Europe in the later period, so imports are expected to decline in February.

2. Demand side: Operating rates in the main downstream synthetic rubber industry remain at relatively high levels, and rigid demand will gradually recover after the holiday, providing certain support to the market. Some pre-holiday transactions for post-holiday delivery were concluded at firm prices. However, due to fluctuations in downstream product trends, buyers remain cautious.

Overall, based on supply-demand fundamentals and price performance on the supply side, the butadiene market is expected to remain firm after the holiday, though with limited upside. Mainstream delivered prices are expected to fluctuate within the range of RMB 10,500–10,800/ton.