November HCBR Supply Forecast: The Output May Increase
In October, there were 18 China’s HCBR producers being investigated, with the total capacity of 1,462kt/a. Therein, 7 produces were in North China, 4 in East China, 2 in South China, 2 in Northeast China, 2 in Northwest China, and 1 in Southwest China. The HCBR unit at Liaoning Shengyou Rubber Technology is under trial operation, so it is not included in the statistics.
HCBR monthly output in October increased from last month.
In October, China’s HCBR monthly output was 70.4kt or so, up about 12.46% M-O-M and down 19.82% Y-O-Y. The reasons for the M-O-M increase were mainly as follows: As for the private HCBR enterprises, the units at Shandong Wanda Chemical and Hipro New Material Technology remained shut. Zibo Qixiang Tengda Chemical restarted the unit on October 5. Zhejiang Transfar Synthetic Materials shut the unit down for 5 days or so in H1 October. Xinjiang Lande Fine Petrochemical restarted the unit at the end of this month. TSRC-UBE (Nantong) Chemical Industrial shut the unit down at the end of this month. On the whole, the output at private HCBR enterprises rose by about 60.61% M-O-M. As for the state-owned enterprises, all units ran normally. The output at state-owned enterprises increased by about 6.79% M-O-M. Overall, China’s HCBR monthly output in October increased M-O-M.
After China National Day holiday, the downstream demand recovered slowly. Besides, the feedstock butadiene prices declined continuously; NR prices at SHFE hovered at lows; the prices of private resources were low. Under such circumstances, traders decreased the offers continuously. Mainstream suppliers cut HCBR ex-works prices by RMB 1,500/mt in total. However, this didn’t stimulate end replenishment but aggravated the bearish sentiment. Only the plants which were in a hurry to use HCBR purchased on a need-to basis. The overall sales were limited. Up to the end of October, the theoretical loss from producing HCBR was around RMB -2,687/mt. With the continuous decrease in butadiene prices, the cost pressure on producers eased slightly.
In November, the HCBR monthly output may continue to increase.
In November, the planned output of HCBR may be around 80kt, up 10kt or 14% M-O-M. In November, as for the state-owned enterprises, all units will run steadily. As for private enterprises, the unit at Hipro New Material Technology plans may be restarted, and other units will run normally. Thus, on the whole, SCI reckons that the monthly output of HCBR may continue to increase M-O-M in November.
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