HCBR Unit Latest Status at Sinopec Qilu Company and Market Performance
Snapshot: A fire broke out in the cracking workshop of Sinopec Qilu Company olefins plant at 9:25 on December 23, 2023, and the fire was initially controlled in the afternoon. According to SCI, the HCBR unit at Sinopec Qilu Company was shut down at night on December 24.
The impact of the accidental unit shutdown on the HCBR output may be controllable.
According to SCI, the 70kt/a HCBR unit at Sinopec Qilu Company mainly produces HCBR 9000. In 2022, the output was nearly 70kt, accounting for around 6% of China’s total HCBR output. In 2023, the monthly average output of this unit was over 6kt. It is estimated that the total output of HCBR may be over 70kt in 2023. The HCBR 9000 produced by Sinopec Qilu Company is mainly supplied to surrounding tire enterprises. The accidental unit shutdown may affect the feedstock supply for some downstream enterprises for a short time.
Shandong HCBR Units Running Status
Remarks: NO = normal operation, SD = shut down
Additionally, other HCBR units include those at Shandong Wintter Chemical, Heze Kexin Chemical, Zibo Qixiang Tengda Chemical, Shandong Yihua Rubber & Plastic Technology, Zhenhua New Materials, and Hipro New Material Technology, with the total monthly output of over 35kt. Some private HCBR units were shut down or ran at low loads. It is easy for the market to fill the supply gap caused by the output loss at Sinopec Qilu Company. However, the HCBR 9000 produced by Sinopec Qilu Company is deliverables of synthetic rubber futures. The accidental shutdown may have some influence on the futures delivery. As of December 25, the price of synthetic rubber futures br2402 increased in the intraday trading, which opened at RMB 12,075 and hit RMB 12,850/mt. The increment was over 5%. After that, it dropped slightly. Up to closing on December 25, China’s average market price rose to around RMB 12,300/mt, up around 6% from December 22. The daily increment was the largest since early September. It is estimated that the weekly operating rate of China’s HCBR industry may decline to below 60%, hitting a high since July 2023.
The balance of C4 and butadiene resources at enterprises may be the key to the operating rate of synthetic rubber units. As for the duration of the unit shutdown and cutting loads, SCI will keep tracking the latest information.
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