Lead: According to data from the General Administration of Customs of the People's Republic of China, China's butadiene export volume in May 2026 amounted to 39,600 tons, a significant increase of 21,000 tons month-on-month, marking the highest single-month export level since 2015. Export flows were notably concentrated in East and Southeast Asia. Considering that South Korea has maintained a relatively high net import level in recent months, and the supply premium for crude oil and downstream petrochemical products is gradually receding following substantive progress in Middle East peace talks, the butadiene market in East Asia is expected to remain under pressure in the near term.

Changes in China's Butadiene Import Structure from April to May

From the composition of China's butadiene export flows, it can be observed that in May, while China's butadiene export volume reached a historical single-month high since 2015, exports to South Korea also hit a elevated level of 31,700 tons. Other export destinations included Japan, Taiwan (China), and Malaysia, which faced significant supply gaps due to the Middle East conflict. The high export volume in May was largely supported by overseas procurement contracts signed before the easing of the Middle East conflict, as well as ongoing demand shortfalls in some countries and regions of East and Southeast Asia. South Korea, as a key consumer and transit hub for butadiene resources in East and Southeast Asia, has actively sought available resources in recent months, partly underscoring the imbalance between supply capacity and demand levels in the region.

From the perspective of China's butadiene import flows, two notable changes occurred in the composition of import sources in May. First, for the first time since 2015, butadiene from Sri Lanka flowed into China. Second, after no imports from South Korea in April, small volumes of South Korean butadiene began to flow back into China in May. These two characteristics indicate that, as global purchases by Asian demand-side players are gradually delivered and the Middle East conflict shows tangible signs of easing, the supply risk premium in the Asian butadiene market has significantly diminished. Supply is gradually becoming more relaxed, and the price center has notably declined.

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Table 1 Comparison of South Korea's 290124 Category Import Volume April-May 2026 (Unit: tons)

| Import Source | May 2026 | April 2026 | Change |
|----------------------|----------|------------|--------|
| China | 30,712.10 | 15,627.70 | +15,084.40 |
| Netherlands | 12,551.90 | 21,480.50 | -8,928.60 |
| India | 4,901.00 | 8,736.90 | -3,835.90 |
| Indonesia | 2,855.60 | 0.00 | +2,855.60 |
| France | 1,803.00 | 0.00 | +1,803.00 |
| Brazil | 0.00 | 7,899.40 | -7,899.40 |
| United States | 0.00 | 2,993.10 | -2,993.10 |
| Total | 52,823.60 | 56,737.60 | -3,914.00 |
| Source: Korea Customs, chempricehub Info collation | | | |

From the structure of South Korea's May import resources, overall import volume did not decrease significantly, but the composition changed considerably. Imports from Europe and Brazil declined notably, while imports from China increased substantially. In May, China's share of supply rose from 27.54% in April to 58.14%, while the share from Europe and the Americas dropped from 57.06% to 27.18%.

Table 2 Comparison of South Korea's 290124 Category Export Volume April-May 2026 (Unit: tons)

| Export Destination | May 2026 | April 2026 | Change |
|--------------------|----------|------------|--------|
| Japan | 7,775.60 | 9,636.40 | -1,860.80 |
| China | 7,127.80 | 0.00 | +7,127.80 |
| Taiwan (China) | 6,077.50 | 2,089.90 | +3,987.60 |
| United States | 2,250.40 | 0.00 | +2,250.40 |
| Brazil | 345.00 | 0.00 | +345.00 |
| United Kingdom | 225.00 | 225.30 | -0.30 |
| Saudi Arabia | 149.90 | 0.00 | +149.90 |
| Netherlands | 0.00 | 30.10 | -30.10 |
| India | 0.00 | 180.20 | -180.20 |
| Malaysia | 0.00 | 2,046.10 | -2,046.10 |
| Total | 23,951.20 | 14,208.00 | +9,743.20 |
| Source: Korea Customs, chempricehub Info collation | | | |

Regarding South Korea's export flows in May, demand gaps due to supply issues in Japan and Taiwan (China) persist, but the significant decline in exports to Malaysia suggests some easing of supply problems in Southeast Asia. Additionally, South Korean customs data reflect a backflow of butadiene resources to China, indirectly indicating a notable alleviation of South Korea's domestic butadiene supply tightness. This aligns with market feedback for June that downstream procurement interest in Asia has clearly weakened.

Currently, with clear signs of de-escalation in the Middle East military conflict, the gradual restoration of shipping through the Strait of Hormuz and crude oil supply from the region is taking effect. Market concerns over supply risks related to crude oil and downstream petrochemical products are gradually fading. In the near term, as maintenance shutdowns of butadiene and upstream units in Europe and the United States conclude, and as shipping costs slowly decrease due to reduced maritime risks, the arbitrage window for exports of butadiene from Europe and the United States to Asia may open. There have been market reports that some U.S. and European resources are expected to arrive in Asia in August-September, which would further loosen butadiene supply in East Asia. Against the backdrop of slow recovery in downstream production margins and continued pressure on finished goods and end-product sales, both domestic and international butadiene markets are likely to remain under pressure in the near term.