Mar China HCBR Supply to Increase
In February 2022, China’s HCBR capacity totaled 1,402kt/a. Seven produces were in North China, 3 in East China, 2 in South China, 2 in Northeast China, 2 in Northwest China, and 1 in Southwest China.
China’s HCBR monthly output in February decreased M-O-M.
In February, China’s HCBR monthly output was 87.4kt or so, down about 13.55% M-O-M and up 4.86% Y-O-Y. As for the state-owned enterprises, the unit at Nanjing Yangzi Petrochemical remained shut. Other state-owned units ran steadily. The monthly output at state-owned HCBR enterprises decreased by about 7.65% M-O-M. As for private HCBR enterprises, Zibo Qixiang Tengda Chemical, Shandong Wintter Chemical, China Zhenhua Oil and Shandong Huayu Rubber reduced output. Therefore, the monthly output at private HCBR enterprises dropped by 21.33% from last month.
In H1 February, the prices of butadiene and Shanghai natural rubber futures went up amid the uptrend of crude oil prices, and HCBR market prices went up accordingly. However, the transactions underperformed after the price increase. Most downstream plants in northern China didn’t resume production, and the weak downstream demand weighed on sales. In H2 February, the increase in butadiene prices slowed down, and the prices of Shanghai natural rubber futures dropped. Moreover, the downstream demand slowly recovered, and the HCBR inventory accumulated during the Chinese New Year holiday. As a result, HCBR market prices trended down. Up to the end of February, the theoretical profit from producing HCBR was around RMB 2,656/mt or so, significantly declining from last month.
China’s HCBR output in March is estimated at 99kt or so.
In March, the unit at Nanjing Yangzi Petrochemical will remain shut. PetroChina Sichuan Petrochemical plans to shut the unit down for maintenance in H2 March. Other HCBR units will have no obvious changes. On the whole, the monthly output at state-owned enterprises will increase by 4.33% M-O-M, and that at private enterprises will increase by 27.70% M-O-M.
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