Abundant HCBR Supply in Sep
HCBR monthly output in August increased M-O-M.
In August, China’s HCBR monthly output was 96kt or so, up about 8.23% M-O-M and up 39.53% Y-O-Y. The reasons for the M-O-M increase were mainly as follows: As for the state-owned enterprises, Sinopec Beijing Yanshan Company restarted the unit and resumed normal production, and the output at Sinopec Qilu Company increased. The monthly output at state-owned HCBR enterprises rose by about 19% M-O-M. As for the private HCBR enterprises, Xinjiang Lande Fine Petrochemical and TSRC-UBE (Nantong) Chemical Industrial shut units down for maintenance within this month. The monthly output at private HCBR enterprises decreased by about 8% M-O-M.
In August, mainstream prices of HCBR first rose and then fluctuated within a narrow range. Within this month, butadiene prices remained in an uptrend, and prices of NR futures at the SHFE fluctuated upwards. Therefore, the low-end PBR prices got support. However, the supply and demand fundamentals improved limitedly. As for the demand, although the tire export market turned better, the increase in demand was lower than that in supply. As for the PBR supply, China’s PBR units were basically under stable production, and only Xinjiang Lande Fine Petrochemical and TSRC-UBE (Nantong) Chemical Industrial shut the units down in H2 August. The supply of Chinese-made PBR resources was abundant. Moreover, coupled with imported resources and accumulated inventory in H1 of 2020, the PBR inventory was high. As a result, the rebound in PBR prices was curbed. Under such circumstances, players were more prudent in operation. Up to the end of August, the theoretical loss from producing HCBR was around RMB 138/mt or so, and the theoretical profit declined from last month.
