ESBR Output to Hit a New Low?

In April 2018, there were 11 ESBR producers in China, with the total capacity of 1,470kt/a.

The output in April greatly decreased from March.

The output in April was 67.9kt, down 14.92% M-O-M and down 23.32% Y-O-Y. Major reasons were as follows. PetroChina Jilin Petrochemical lowered the operating rate unexpectedly to around 50%, and the output halved from last month. Zhejiang Vitile Rubber, Zhejiang Zhechen Rubber and Shen Hua Chemical Industrial all reduced the operating rates, influenced by the cost pressure. Although PetroChina Fushun Petrochemical restarted the third line, the operating rate was largely unchanged. Overall, the total output obviously fell from last month.

Feedstock prices stayed at highs, weighing on the ESBR producers. Butadiene prices climbed from RMB 9,500/mt to RMB 10,500/mt. Styrene prices hovered between RMB 10,000/mt and RMB 10,450/mt. Besides the cost pressure, the buying sentiment was also tepid. Yet, marketing companies raised the EXW prices by RMB 900/mt in total, due to the supply decrease. Some private producers cancelled the shutdown plans. The theoretical cost of ESBR production was RMB -600/mt, and the loss dropped by RMB 700/mt M-O-M.

The planned output in May will decline from April.

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