Oil-Extended SSBR Output Increased Leading to a Change in Price Spread Between Oil-Extended SSBR and ESBR
Key words: ESBR, SSBR, Oil-extended, Output, Price spread
Snapshot: Since Q2, the increase in the output of Chinese-made oil-extended SSBR has changed the previous price spreads between oil-extended ESBR 1712/1723 and SSBR 2564S. The oil-extended SSBR price changed from much higher to slightly higher than the ESBR 1712/1723 prices, even lower than the ESBR 1723 price. With the oil-extended SSBR output ramping up, the price spread above is likely to remain in the short term.
The price spread between oil-extended SSBR and oil-extended ESBR changed.
According to SCI, after the 60kt/a SSBR unit at Zhejiang Petroleum & Chemical ran steadily, China’s oil-extended SSBR monthly output rose by nearly 200% Y-O-Y in April and May. The large Y-O-Y increase in the output of oil-extended SSBR products squeezed the market of ESBR 1712/1723. Thus, the oil-extended SSBR price changed from much higher than the ESBR 1712/1723 prices to lower than the ESBR 1723 price.
Dragged down by the Chinese-made oil-extended SSBR market competition, the SSBR 2564S price has crashed since March. Up to May 30, the SSBR 2564S price was RMB 11,200/mt, which was RMB 2,300/mt lower than the highest point in March. The decrement was over 17%. Meanwhile, the price of ESBR 1723 was around RMB 11,600-11,800/mt on May 30, which was about RMB 500/mt higher than the SSBR 2564S price. The ESBR 1712 was around RMB 10,900/mt, which was only RMB 300/mt lower than the SSBR 2564S price. ESBR 1723 is the substitute to ESBR 1712. However, as the supply of Chinese-made oil-extended SSBR with excellent performance increased, and its price was lower than the ESBR 1723 price, the consumption of ESBR 1723 was squeezed.
The newly added SSBR capacity was released, leading to a continuous change in the oil-extended SBR supply structure.
In 2022, the SSBR capacity at PetroChina Dushanzi Petrochemical expanded to 120kt/a. China’s SSBR capacity reached 330kt/a, accounting for 20% of the total SBR capacity. The self-sufficiency of SSBR moved up in China. After the 60kt/a SSBR unit at Zhejiang Petroleum & Chemical went into production in February 2023, SSBR took up higher proportion in the market. As SSBR has excellent comprehensive performance, including high wear resistance, low heat generation and excellent wet skid resistance, downstream tire users incline to use it. On the back of rising supply and price advantage, downstream tire enterprises use more oil-extended SSBR and less ESBR 1712/1723 after testing formulas.
In 2024, there may be 85kt/a SSBR capacity to be newly added. Then, the supply structure of the SBR industry is expected to improve. As seen from plans of SSBR, the functionalized SSBR capacity may be only 25kt/a. Thus, the SSBR supplied in China’s market is likely to be mainly normal SSBR used for tire production in 2024, which may be obviously homogenous. Downstream users will possibly adjust the formula according to the cost and performance. From the perspective of currently SSBR market dealing rules, the consumption of SSBR is predicted to ramp up in the future market. At that time, the price of oil-extended SSBR is expected to change violently based on the market competition. However, the consumption of ESBR 1712/1723 may continue to shrink.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
