Who Will Be the Winner Against ESBR Output Reduction?

China’s total output of ESBR from January to May is estimated at 350kt, down 60kt or 17% Y-O-Y. China’s largest ESBR unit (250kt/a) at Sinopec Qilu Company ran abnormally from October 2017, which led to the output decrease. This was a chance for other producers. What happened to the market shares?

The output at Sinopec from January to May shrank by around 75kt, occupying around 27% of the total. Hereinto, that at YPC-GPRO (Nanjing) Rubber and Fujian Fuxiang Chemical increased by 10kt Y-O-Y, while that at Sinopec Qilu Company decreased by 84% Y-O-Y. The output at PetroChina rose by 9% Y-O-Y, accounting for 33% of the total. The output at PetroChina Fushun Petrochemical greatly changed. The output at non-state-owned producers climbed by 3% Y-O-Y. It occupied 40% of the total and the largest market shares. Hereinto, the output at Zhejiang Vitile Rubber rose by 22%. The unit at Tianjin Lugang Petroleum and Rubber restarted in January after 2.5 years’ shutdown.

The completion of Sinopec Qilu Company’s VOCs unit upgrading will trigger another round of competition. Sinopec Qilu Company’s product quality, market recognition, cost and capital strength have obvious advantages. It is estimated that the market shares in the H2 of the year will noticeably change.