SBS Prices Trend Down in 2023, and Cost to Enhance Influence on SBS Market
Snapshot: In 2023, China’s SBS market prices declined Y-O-Y overall, showing an N-shaped trend. With fiercer market competition, the cost is expected to have more influence on the SBS market.
In 2023, the prices of China’s dry SBS (including road bitumen modification-used dry SBS) showed an N-shaped trend. According to SCI, from January to October 2023, the average price of Baling 792E in the Jiangsu market was RMB 12,851/mt, down 8.76% Y-O-Y. The overall prices were lower Y-O-Y.
China’s SBS market trend in 2023 can be divided into three stages.
Stage 1: Bolstered by the rise in the feedstock butadiene price in January and February, China’s dry SBS market price showed an uptrend. Yet, as the unit maintenance was less frequent from 2022, and the imported resources rose notably, the supply increased significantly. The operating rate of major downstream industries recovered slowly, weighing on the increment in the SBS prices.
Stage 2: From March to June, the price of major feedstock butadiene fluctuated downwards. The decrement was relatively notable. Dragged down by cost, the dry SBS price trended down. As major units took maintenance and the butadiene price rebounded slightly in mid- and late April, the dry SBS prices edged up. Yet, the increase lasted only for a short period. In May, as the butadiene price fell and the demand was expected to be tepid, the dry SBS market prices slid again.
Stage 3: China’s SBS market price climbed, mainly driven by the rise in cost. Besides, the period from August to October was the downstream construction peak season. Thus, the SBS market prices have been rising for nearly 4 months since the beginning of July.
In 2024, China’s average market price of butadiene is predicted to rise from 2023. The average butadiene price in H1, 2024 may be higher than that in H2. In H1, 2024, newly added capacity is expected to be released limitedly, and units may take maintenance intensively in Q2. Thus, the supply is likely to strongly bolster the butadiene price. The butadiene price is expected to mainly fluctuate upwards. In H2, some new butadiene capacity may be released, and the unit maintenance is likely to come to an end, so the support from supply may weaken compared to H1. Yet, considering that the end demand may constantly recover and some new downstream capacity is likely to be released, the decrement in the butadiene market price may be also limited.
It is projected that the SBS market prices may show an N-shaped trend in line with the price trend of butadiene in 2024. With China’s SBS capacity expanding and imported resources increasing, China’s SBS market competition is expected to intensify in 2024 and the profit at producers may further shrink. Thus, the price of major feedstock butadiene is likely to affect the SBS price directly in the future.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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