Jul SBR Price Trended Sideways for Lack of New Drivers
Snapshot: Up to July 2023, there have been 11 ESBR enterprises in China, with the capacity of 1,460kt/a in total. Samples of this research cover all China’s ESBR enterprises, including 2 ESBR enterprises in North China, 4 in East China, 2 in South China, 2 in Northeast China and 1 in Northwest China.
In July, the ESBR output declined M-O-M.
According to SCI, the ESBR output in July was around 75.2kt, down 9.18% M-O-M and down 2.77% Y-O-Y. The main reason was that the output of the SBR units at PetroChina Lanzhou Petrochemical, Shen Hua Chemical Industrial and Hangzhou Yibang Rubber decreased. The ESBR output in July fell by 15.7kt. The output of the SBR units at Sinopec Qilu Company and Nanjing Yangzi Petrochemical and Rubber increased, but the increment failed to offset the decrement. Overall, the SBR output decreased by 7.6kt or so in July. The units at Tianjin Lugang Petroleum Rubber and Fujian Fuxiang Chemical remained offline.
In July, the SBR market price tended to be range-bound after rising. The price of feedstock butadiene trended up, and the SBR output tightened. Bolstered by the bullish cost and supply, the SBR market price ramped up. But the negotiation atmosphere was relatively tepid in the spot SBR market, putting pressure on the rise in the SBR price. The gross profit of China’s ESBR industry in July was RMB 1,604/mt, up RMB 51/mt M-O-M. The prices of butadiene and styrene both trended up. The monthly average price of SBR also rose, but the increment was higher than that in the feedstock prices. Thus, the gross profit of the SBR industry increased notably. Amid current profit, the output of the SBR units maximized in July. The supply of SBR was relatively normal.
The total ESBR output is expected to see a M-O-M increase in August.
According to SCI, the ESBR output in August may be around 89.7kt, up 19.28% M-O-M and up 28.88% Y-O-Y. In August, PetroChina Lanzhou Petrochemical and Hangzhou Yibang Rubber are expected to increase production. The SBR unit at Shen Hua Chemical Industrial may take maintenance in late August, rendering a decrease in the SBR output. But the decrement in the output may fail to offset the increment. Overall, the total SBR output in July is likely to rise by 14.5kt or so. The units at Tianjin Lugang Petroleum Rubber and Fujian Fuxiang Chemical will possibly continue to be offline.
In August, the SBR price is expected to face headwinds in rising. As for the supply, the SBR output may increase, weighing on the SBR price. As the feedstock prices of semi-steel tires may stay low, the overall gross profit was fairish. Besides, the export and OE tire demand will also possibly bolster the semi-steel tire production. Thus, it is projected that the operating rate of the semi-steel tire industry may be high. However, the price of spot SBR resources will continue to be higher than that of natural rubber, curbing the SBR spot dealings. Dealings of spot SBR resources are predicted to be conducted in small orders on rigid demand, which may hardly improve. There may be no new bullish factor in supply-demand fundamentals driving up the SBR price in August. Therefore, it is projected that the SBR price may inch up, but the increase is likely to be limited.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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