2025 SBS Supply to Face Pressure on Unit Startup
Introduction: In recent years, China’s SBS capacity has been in an uptrend. In 2025, many new SBS units are expected to go into production, including the 140kt/a unit at Shanghai Baling New Materials and the 80kt/a unit at PetroChina Guangxi Petrochemical. Thus, China’s SBS supply may continue to face pressure in 2025.
In recent years, China’s SBS capacity has been increasing. In 2024, China’s total SBS capacity reached 1,790kt/a, ranking first in the globe. There are many units to come on stream in the future. After 2026, the peak of capacity expansion is likely to come to an end. By 2029, China’s capacity is likely to reach 2,010kt/a theoretically, with an average growth rate of 2.46%.
In recent years, the growth in SBS capacity slowed down. First, the SBS market witnessed an oversupply with the SBS and downstream industry environment changing, and the profits trended down in all links. Thus, the enthusiasm of capital for SBS investment has rapidly waned compared with that in previous years. Most of the newly built units were approved in the early period. After 2026, there may be no plan for newly added capacity. Second, existing SBS producers accelerated the adjustment of existing production lines and product structure due to the changes in profits, so some SBS production lines were transformed into production lines of SEBS, LCBR or SSBR with fairish profitability.
China’s SBS capacity is expected to continue to increase, but the growth may slow down. There may be 220kt/a of newly added SBS capacity in the future, including 140kt/a at Shanghai Jinshan Baling New Materials and 80kt/a at PetroChina Guangxi Petrochemical, which is expected to be concentrated in 2025. The demand is also likely to increase, but the growth rate may be lower than that of supply. The newly added SBS capacity may gradually come on stream, putting pressure on China’s SBS consumption in 2025, and thereby affecting the supply-demand relation and curbing the SBS market price. After 2026, the oversupply is likely to gradually ease with the peak of capacity expansion coming to an end.
In the future, China’s total SBS supply is anticipated to continue to rise. The newly added units at major SBS producers represented by Sinopec and PetroChina are likely to go into production in succession, so the output may move up. The import volume will possibly remain high. Overall, the total supply is expected to continue to increase. However, China’s overall demand for SBS is likely to improve limitedly under the influence of the macro and the downstream industry environment, thereby affecting the total supply. After the peak of capacity expansion comes to an end, the overcapacity may be gradually digested, and the import volume is likely to dip. Thus, the growth in China’s total SBS supply will possibly slow down from 2028. Before that, China’s SBS supply will likely still face pressure.
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