H2 2022 NBR Price To Be Determined by Real Supply-Demand Relationship
In H1 of 2022, the overall NBR market price fluctuated downwards. In H2 of 2022, the supply volume is expected to increase, while there are uncertainties in the recovery of demand. The real relationship between supply and demand may be the key to the pricing of the NBR market.
In H1 of 2022, the overall NBR market price fluctuated downwards. Taking 3305E produced by PetroChina Lanzhou Petrochemical as an example, by June 30, the closing price in East China was RMB 18,200-18,400/mt, which decreased by 22.78% from the beginning of this year. The average price in H1 of 2022 was RMB 22,890/mt, which decreased by 1.46% from H2 of 2021 but increased by 16.45% Y-O-Y.
In H1 of 2022, the NBR market only showed an upward trend from March to H1 of April supported by the shortage of supply. As news of routine unit maintenance made by China’s domestic producers was released ahead of time and the shipping schedule of some European resources was extended, the NBR market price remained high. Besides, affected by external factors, transportation at home and abroad was unsmooth. Some traders were reluctant to sell at low prices, which boosted the NBR market price. However, in Q2, the bullish effect of unit maintenance news subsided, and coupled with the drag of goods released by the newly added unit and the slow recovery of downstream demand, the NBR market price turned downwards.
H1, 2022 Fundamentals Review
China’s NBR output increased
The fluctuation of the commodity market is mostly affected by the expected impact, which drives price changes. Specifically, at the end of Q1, the release of news about the unit maintenance in Northwest and East China resulted in the expectation for a supply cut, which supported the price increase for a short time. At the same time, as the shipping schedule of some European resources was extended, the concern about the reduction of the import volume boosted the market to some extent. In the later stage of Q2, with the commissioning of the new unit in Northwest China, the supply was expected to increase, which accelerated the price decline. SCI found that the actual output of NBR in Q1 of 2022 increased from last year, but the import volume showed a downward trend.
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