Orient Securities Company Limited released a research report indicating that butadiene prices have reached historical highs. With expectations of supply contraction combined with maintenance shutdowns, the firm anticipates continued tight supply and elevated prices for butadiene. It favors integrated companies with stable butadiene production capabilities. Furthermore, alternative production pathways for butadiene are expected to benefit. The report is optimistic about producers utilizing the alternative route (caprolactam-aminocapronitrile-hexamethylenediamine-nylon 66). The main viewpoints from Orient Securities Company Limited are as follows:

Butadiene Prices Experience Significant Increase According to Wind data, as of March 13, 2026, the China spot price and CFR midpoint price for butadiene were 15,400 yuan/ton and $2,050/ton, respectively. Weekly increases were 21.26% and 36.67%, monthly gains were 50.98% and 61.42%, and quarterly rises were 110.96% and 135.63%. The price percentiles stood at 94.90% and 96.40%, indicating prices are at historically high levels.

Supply Tightness and Cost Support Expected to Sustain High Prices Data from Bai Chuan Ying Fu shows a significant decline in the operating rate for butadiene. As of March 13, 2026, the weekly operating rate was 75.93%, a decrease of 5.74 percentage points from the previous week. Some butadiene units are undergoing maintenance, and other producers may have maintenance plans. Coupled with the challenging international situation, some companies might reduce operating rates or output due to raw material cost pressures. Concurrently, imports are expected to be tight, leading to anticipation of domestic supply constraints. Tight physical availability is likely to support merchant offers and potentially drive prices even higher.

Industry Chain and Alternative Pathways Set to Benefit The butadiene price increase is expected to benefit companies with stable, integrated butadiene production. Qixiang Tengda possesses an annual butadiene production capacity of 150,000 tons, with downstream capacities of 90,000 tons for polybutadiene rubber and 200,000 tons for nitrile latex. Additionally, alternative pathways for butadiene are anticipated to gain. Adiponitrile, a downstream product of butadiene, is a key intermediate for producing nylon 66, traditionally made via the butadiene-adiponitrile-hexamethylenediamine route. Currently, the butadiene method accounts for 68.7% of adiponitrile production, making it the mainstream process. Tight supply and high prices for butadiene could further impact adiponitrile and its downstream production, making alternative routes advantageous. For nylon 66 production, an alternative path involves the direct production of aminocapronitrile from caprolactam through amination and dehydration, followed by hydrogenation to produce hexamethylenediamine, bypassing the traditional adiponitrile process. Pingmei Shenma Group has already commissioned a 100,000-ton aminocapronitrile facility. Shenma股份, leveraging the aminocapronitrile raw materials from its controlling shareholder, is developing a new process route for hexamethylenediamine, achieving domestic substitution for a key raw material in the nylon 66 industry chain.

Investment Recommendation: Related targets include Qixiang Tengda and Shenma股份. Risk Warning: Butadiene supply returning to normal levels, sharp fluctuations in raw material prices, and nylon 66 demand falling short of expectations.