Sep SBR Output to Increase, Curbing the Price Rising
Snapshot: Up to August 2023, there have been 11 ESBR enterprises in China, with a 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 August, the ESBR output rose M-O-M.
According to SCI, the ESBR output in August was around 82.8kt, up 9.96% M-O-M and up 18.97% Y-O-Y. The reason was that the output of the units at PetroChina Jilin Petrochemical, PetroChina Lanzhou Petrochemical and Hangzhou Yibang Rubber increased. After calculation, the ESBR output in August increased by 9.5kt M-O-M. In August, the output of the unit at Shen Hua Chemical Industrial slid, but the decrement in the output failed to offset the increment. Overall, the total SBR output in August declined by around 2kt M-O-M. The SBR units at Tianjin Lugang Petroleum Rubber and Fujian Fuxiang Chemical remained offline.
In August, the SBR market price tended to be range-bound after rising, but at the end of August, the SBR price trended up again. The prices of feedstock butadiene and PBR futures moved up, bolstering the SBR market atmosphere. Thus, the SBR market price ramped up. However, the end tire users showed resistance to the increment in the SBR price and continued to purchase SBR on rigid demand. The negotiation atmosphere of the spot SBR market was relatively weak, so the SBR price faced pressure in rising constantly. At the end of August, driven by the rise in the PBR price, the SBR market price continued to increase. In August, the gross profit of China’s ESBR industry was RMB 1,009.5/mt theoretically, down RMB 577.4/mt. The prices of feedstock butadiene and styrene both saw M-O-M increases. Although the monthly average price of SBR also climbed, the increment was lower than that in the feedstock prices. Therefore, the gross profit of SBR trended down theoretically. Amid such profit, the output of SBR units maximized in August. Thus, the SBR supply was relatively normal.
In September, the ESBR output is expected to rise M-O-M.
According to SCI, the scheduled ESBR output in September is around 85.6kt, up 3.38% M-O-M and up 1.18% Y-O-Y. In September, PetroChina Lanzhou Petrochemical and Hangzhou Yibang Rubber may arrange more production. Although the SBR unit at Shen Hua Chemical Industrial may take maintenance, and PetroChina Fushun Petrochemical may cut production, the decrement in the ESBR output is expected to fail to offset the increment in it. Overall, the total SBR output is predicted to rise by around 2.8kt. The SBR units at Tianjin Lugang Petroleum Rubber and Fujian Fuxiang Chemical are likely to remain offline.
It is projected that the SBR price may increase in September. In supply, the SBR output is likely to ramp up, weighing on the SBR price. However, the operating rate of the semi-steel tire industry may remain high, leading to some rigid demand for SBR. Yet, the price of spot SBR remains higher than that of spot natural rubber, curbing the trading of spot SBR. Buyers’ sentiments are expected to fail to boost the SBR market. Thus, the supply-demand fundamentals may fail to drive up the SBR price. However, considering the strong support from the expected PBR price, it is predicted that the SBR price will possibly trend up in September. The increment is expected to be related to the price fluctuation range of related products.
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