Profits of Oil-Extended SBS Increased

Profits of Oil-Extended SBS Increased 

In September 2018, feedstock butadiene prices trended down. Therein, butadiene prices at East China Sinopec Marketing decreased by RMB 1,100/mt from RMB 13,500/mt to RMB 12,400/mt. Feedstock styrene prices fluctuated within a narrow range. On the whole, as mainstream costs of SBS declined, the profits of oil-extended SBS increased to some extent.

Remarks: Oil-extended SBS F875 is produced by Sinopec Maoming Company.

SCI data showed that by September 20 of 2018, the profit of oil-extended SBS was notionally RMB 285/mt, up RMB 99/mt M-O-M. But the overall profits of oil-extended SBS was at low levels. The decrease in oil-extended SBS profits were greater in H2 August and H1 September, due to high costs.

Since the end of August, EXW prices of oil-extended SBS F875 at Sinopec South China Marketing had stayed at RMB 13,400/mt. Offers of oil-extended SBS hovered at highs. However, with the downstream plants having finished replenishment in a short time, the trading correspondingly declined. As a result, oil-extended prices inched down. In Fujian, offers of F875 declined to RMB 13,650/mt from RMB 13,850/mt in early September.

Feedstock: With the decrease in feedstock prices, cost pressure of oil-extended SBS was slighter. In 2018, the demand for butadiene from the downstream synthetic rubber industry appeared average. Moreover, with the international prices of butadiene decreasing greatly in earlier stage, the bearish sentiment towards China’s butadiene market emerged earlier than expected. As a result, the mainstream and private producers in China cut butadiene prices in succession. Styrene prices were relatively stable, but prices in some regions frequently fluctuated within a narrow range. Market participants held a mixed sentiment towards the styrene market and operated slowly.

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