Shuanyi Securities: Butadiene Prices High and Supply Tight, Industrial Chain and Alternative Pathways Expected to Benefit

Eastern Securities released a research report stating that the price of butadiene is at a historical high, with supply contraction expectations combined with maintenance, leading to tight supply and high prices for butadiene. The report is optimistic about companies capable of stable production across the entire butadiene industry chain. Additionally, alternative pathways for butadiene are expected to benefit, especially companies with alternative production routes (caprolactam–hexamethylenediamine–nylon 66).

Key points from Eastern Securities are as follows:

Butadiene prices are rising sharply

According to Wind, as of March 13, 2026, the spot and CFR intermediate prices in China are 15,400 RMB/ton and $2,050/ton, respectively, with weekly increases of 21.26% and 36.67%, monthly increases of 50.98% and 61.42%, and quarterly increases of 110.96% and 135.63%. Price percentiles are at 94.90% and 96.40%, indicating prices are at relatively high levels historically.

Supply tightening expectations and cost support suggest high butadiene prices and tight supply

According to Baichuan Yingfu, the operating rate of butadiene has significantly declined. As of March 13, 2026, the weekly operating rate is 75.93%, down 5.74 percentage points from the previous week. Some small-scale units are under maintenance, and other manufacturers may have planned maintenance. Coupled with the severe international situation, some companies face raw material cost pressures and may reduce production, while import sources are expected to be tight. Domestic supply is also expected to tighten, with tight spot circulation supporting merchants to further raise offers.

Industry chain and alternative pathways are expected to benefit

The rise in butadiene prices benefits companies capable of stable production of butadiene across the entire industry chain. Qixiang Tengda has an annual capacity of 150,000 tons of butadiene, with downstream capacities of 90,000 tons of styrene-butadiene rubber and 200,000 tons of acrylonitrile-butadiene latex. Additionally, alternative pathways for butadiene are expected to benefit. Caprolactam is a downstream product of butadiene and a core intermediate for nylon 66 production, which is produced via the butadiene–caprolactam–hexamethylenediamine route. Currently, 68.7% of caprolactam is produced through the butadiene route, making it the mainstream method. Under tight and high-priced butadiene conditions, this may further impact caprolactam and downstream production, with alternative routes likely to benefit. Nylon 66 can be produced by directly converting caprolactam into aminohexanitrile through ammoniation and dehydration, then hydrogenating to obtain hexamethylenediamine, bypassing traditional caprolactam processes. Shenhua Shenda Group has already commissioned a 100,000-ton plant for aminohexanitrile, and Shenyang Shenda relies on its controlling shareholder’s aminohexanitrile raw material to develop new production routes for hexamethylenediamine, achieving domestic substitution of key raw materials in the nylon 66 industry chain.

Investment recommendations: Relevant stocks: Qixiang Tengda, Shenhua Shenda.

Risk warnings: Normalization of butadiene supply, sharp fluctuations in raw material prices, and weaker-than-expected demand for nylon 66.