Nov SBR Supply Stable as Enterprises Produce Normally
Snapshot: Up to November 2023, there have been 11 ESBR enterprises in China, with a capacity of 1,460kt/a in total. Samples of this research cover all of China’s ESBR enterprises, including 2 ESBR enterprises in North China, 4 in East China, 2 in South China, 2 in Northeast China and 1 in Northwest China.
In November, China’s ESBR output rose M-O-M.
According to SCI, China’s ESBR output in November was around 100.8kt, up 2.65% M-O-M and up 17.21% Y-O-Y. The M-O-M rise was mainly as the output of SBR units increased at PetroChina Fushun Petrochemical and Zhejiang Vitile Rubber. In November, China’s ESBR output increased by 2.6kt M-O-M. No SBR producer saw a M-O-M decline in output. On the whole, China’s SBR output rose by around 2.6kt M-O-M in November. The SBR units at Tianjin Lugang Petroleum Rubber and Fujian Fuxiang Chemical remained offline.
In November, the SBR market price trended sideways after falling, and it edged up at the end of November. The reasons for the price falling were as follows. First, end tire enterprises purchased SBR on rigid demand. Spot dealings in the market saw no significant improvement. Second, the operating rate of the SBR industry was stable, leading to a normal supply of spot SBR resources. The supply-demand fundamentals failed to drive up the SBR price effectively. Thus, the market price trended down. However, the price of feedstock butadiene increased, bolstering the SBR market. Thus, the SBR price edged up at the end of November, but buyers showed thin interest in purchasing. In November, the gross profit of China’s ESBR industry was RMB -416.3/mt theoretically, down RMB 1,166.3/mt M-O-M. The butadiene price rose, while the monthly average price of SBR dropped. Thus, the gross profit of the SBR industry slid. Amid such losses, the SBR output is still maximized, leading to a relatively ample supply.
In December, the ESBR output is expected to decline M-O-M.
According to SCI, China’s ESBR output is expected to be around 97.7kt in December, down 3.08% M-O-M but up 12.04% Y-O-Y. In December, the SBR unit at Huizhou LCY Elastomers may cut output. Other SBR units are expected to run normally. Overall, the total output of SBR in December is estimated to fall by around 3.1kt. The units at Tianjin Lugang Petroleum Rubber and Fujian Fuxiang Chemical may remain offline.
The SBR price is predicted to be range-bound after falling. As for supply, the SBR output may edge down, but the overall supply may remain ample, which is likely to weigh on the SBR price. The downstream tire enterprises are expected to enter the traditional slack season of sales, consuming the inventory of finished products slowly. Thus, the operating rate of the tire industry is likely to drop, leading to a decline in the demand for SBR. Therefore, downstream tire enterprises are expected to show thin interest in purchasing. The supply-demand fundamentals may fail to drive up the SBR price. In addition, the price of feedstock butadiene is predicted to trend down, curbing the SBR price. Thus, the SBR price is expected to fall first, and then tend to be range-bound.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
