Weak NBR Market in Oct Amid Supply-Demand Imbalance
Introduction: China’s domestic NBR market price showed a downward trend in October, witnessing the contradiction between supply and demand. Traders hold bearish sentiments about the future market, and the overall NBR market price may show a weak trend.
The sample number of domestic NBR producers monitored by SCI is 5, including 1 in Northwest China and 4 in East China, with a total capacity of 275kt/a and a capacity coverage rate of 100%.
Oct Operating Rate Inched Down
In October, the operating rate of China’s NBR industry was 80.55%, down 1.87% from last month but up 17% from last year, and the output of NBR increased by 1% M-O-M. PetroChina Lanzhou Petrochemical produced NBR at full load in October. As for other NBR producers, Ningbo Shunze Rubber stopped production of NBR on September 25 and restarted on October 8; Zhenjiang Nantex Chemical Industry stopped production on October 27, and the shutdown was expected to last until November 11; ARLANXEO TSRC (Nantong) Chemical Industrial and INSA GPRO (Nanjing) Synthetic Rubber maintained normal operation. As there was one day more in October than in September, the total output increased, but the daily output decreased. On the basis of comprehensive calculation, the operating rate of China’s NBR industry decreased slightly in October.
The supply and demand fundamentals of the NBR industry were relatively weak this month. The relatively tight supply of some grades of spot goods failed to support the NBR market, whereas some downstream producers’ orders underperformed, and they consumed feedstock inventory mainly. Due to the lack of confidence in later downstream consumption, the circulation of spot goods was slow in the market. Affected by this, goods holders lowered their intended selling prices, but it failed to stimulate buying sentiments.
Nov NBR Supply to Be Sufficient
It is estimated that the operating rate of China’s domestic NBR producers may hover around 80%. PetroChina Lanzhou Petrochemical’s NBR unit is expected to run at full load. Zhenjiang Nantex Chemical is expected to restart its NBR unit around November 11, and other NBR units are anticipated to maintain normal operation. Therefore, the NBR market supply is expected to be sufficient, while the demand is anticipated to remain weak, making it hard to solve the contradiction between supply and demand. The overall NBR market is expected to fluctuate downwards in November.
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