SBR and Butadiene Correlation Coefficient Analysis
Keywords: SBR, Butadiene, Correlation coefficient
Snapshot: From 2019 to 2023, the price correlation between SBR and feedstock butadiene was weaker than that from 2014 to 2018. In the next five years, it may hardly improve, but the prices of SBR and butadiene are expected to influence the atmosphere of each other.
In the previous ten years, the correlation coefficient between the prices of SBR and butadiene has weakened.
The correlation coefficient between the prices of SBR and butadiene was 0.51 from 2019 to 2023, which was 0.44 lower than that from 2014 to 2018. The correlation between the two changed from strong to weak. The main reason was as follows. From 2019 to 2023, the ethylene, propylene and butadiene capacity has increased rapidly with the refining-petrochemical integration project expanding. Yet, the downstream units developed slowly, causing a notable rise in butadiene resources. From 2019 to 2023, the feedstock butadiene price was much lower than that from 2014 to 2018. On the back of ample butadiene supply, the capacity utilization rate of the SBR industry has been gradually maximized. Considering the stability of customer use, SBR enterprises hardly cut production due to the fall in the butadiene price. The influence of the butadiene price fluctuation on the SBR supply weakened. Thus, the influence of it on the SBR price also ebbed. In some periods, the butadiene price trended down, while the SBR showed an uptrend. The correlation coefficient between the two fell to 0.51. However, some SBR enterprises also priced and settled based on the feedstock butadiene price formula with long-term customers.
In 2023, the correlation coefficient between the prices of SBR and butadiene was low.
In 2023, the correlation coefficient between SBR and butadiene was 0.4. The main reason was that the butadiene capacity expanded by 600kt/a in 2023. The ample supply dragged the butadiene price to a relatively low level in history. As the profit rose, SBR enterprises mainly ran their units at high loads. In 2023, although the SBR units faced losses in some periods, SBR enterprises maintained stable supply considering the cooperation stability with customers. Therefore, the butadiene price fluctuation faced higher pressure in transferring to the downstream SBR price. In 2023, the correlation coefficient between SBR and butadiene fell to 0.4. In the future, it may hardly rebound, although the fluctuation of the butadiene price may still influence the SBR market atmosphere.
Overall, the correlation coefficient between SBR and feedstock butadiene has fallen in the past five years. In the next five years, the butadiene capacity is expected to expand by around 3,000kt/a, leading to a rise in the butadiene supply. As for downstream consumption fields, the growth rate of the PBR, SBR, SBS and ABS capacity is predicted to be far lower than that of the butadiene capacity. Thus, the butadiene supply may be increasingly ample in the next five years, and the butadiene price is expected to hover at lows. Accordingly, there may be more butadiene resources for the SBR industry to choose in the next five years. Besides, with low feedstock prices, the capacity utilization rate of the SBR industry is expected to stay high. In conclusion, it is projected that the fluctuation of the butadiene price may hardly affect the SBR supply. The correlation coefficient between SBR and butadiene is likely to increase limitedly.
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