Feb Operating Rate of SBS Industry Changed Slightly
Snapshot: In February, the operating rate of China’s SBS units was 60.87%, up 0.85% M-O-M. This month, the operating rate of China’s SBS units changed slightly. No major units took maintenance. The operating rate of private units was low. Ningbo Jinhai Chenguang Chemical restarted its SBS unit in H2 February. The operating rate of SBS industry recovered somewhat.
The research in February covered 14 sample enterprises, including 4 China’s state-owned enterprises, 1 Taiwan-funded enterprise, 3 joint ventures and 6 private enterprises. The total capacity reached 1,600kt/a. The samples covered 100% SBS enterprises.
The operating rate of China’s SBS industry was 60.87% in February, up 0.85% M-O-M. This month, the operating rate of China’s SBS units changed slightly. No major units took maintenance. The operating rate of private units was relatively low. Ningbo Jinhai Chenguang Chemical restarted its unit in H2, February. The SBS unit at Zhejiang Zhongli Synthetic Material Technology finished the maintenance starting from January. Overall, the operating rate of SBS industry edged up.
The overall profit of SBS inched up in February. The margin of profit at SBS enterprises stayed relatively low. Considering the depreciation of units, some enterprises nearly faced losses. This month, the major feedstock butadiene price fluctuated upwards. The butadiene price at Sinopec in East China closed at RMB 10,000/mt in February. The styrene price showed a U-shaped trend, closing at around RMB 8,550/mt this month. The cost of SBS ratcheted up by 7.63% M-O-M. According to SCI, the price of Baling dry SBS 792 rose to RMB 13,000/mt up to February 24. The monthly average price increased by around 7.35%. The monthly average profit was RMB 551/mt, up RMB 8/mt M-O-M. (Remarks: Due to the continuous dynamic changes in the price of initiators, the processing cost of producers cannot adopt constant data. The above profit data reflects the trend of profit changes.)
The operating rate change in March may affect the SBS market.
According to the production plan announced by SBS enterprises, the operating rate of SBS industry is expected to change slightly in March. Only some private enterprises are expected to cut the operating rate slightly. Although the profit may remain low, enterprises will possibly produce steadily. In March, the butadiene market price is estimated to inch up, as some resources may be exported and the intensive maintenance for SBS units is expected to be consumed ahead of time. Yet, the increment in butadiene price is estimated to be limited, curbed by weak demand.
Besides the strong support of cost, SBS market may be affected by the expected change of demand in March. As downstream enterprises may fail to accept the current SBS price, some social inventory is likely to pile up, aggravating the stalemate between supply and demand. Without obvious change in demand, whether the downstream operating rate may recover effectively is likely to be crucial. According to SCI, the downstream enterprises may constantly usher in production in mid-March, as the modified bitumen waterproof roll and modified bitumen resources stocked ahead were scarce. The demand for dry SBS and road modification-used SBS is expected to rebound.
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