Oil-Extended SBS Prices Rose amid Tight Supply
In H1 December, China’s oil-extended SBS prices remained in a downtrend. On the one hand, there were low-cost resources in the market, and major suppliers slightly cut prices. On the other hand, downstream plants mainly purchased on a need-to basis with a bearish sentiment. In H2 December, the spot supply was gradually tight, and traders were active in inquiry. Accordingly, mainstream negotiation prices went up. Heading into January 2022, oil-extended SBS prices rose further owing to the tight spot supply and some producers’ production reduction. Up to December 12, in Fujian, delivered prices of oil-extended SBS F875 closed at RMB 12,000/mt, 6.19% higher than the price of RMB 11,300/mt on December 20.
In January, the supply side will provide strong support to the oil-extended SBS market. The tight spot supply will linger. Some producers plan to reduce production in February, and some traders have started pre-sale. In terms of demand, most shoe material plants will suspend production for the Chinese New Year holiday from mid-January, and end enterprises intend to stock up before the holiday, the wait-and-see sentiment will not be alleviated amid the tight supply and anticipated price increase.
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