EPDM Units Gradually Restart in H2 June

The EPDM units which were shut down for maintenance will gradually restart in H2 June. The tightened supply for part of the grades will be eased. However, the end demand in China’s EPDM market gradually enters the slack season. The price rise of EPDM in the regions outside China could hardly boost China’s market.

The domestic and overseas EPDM units restarted, but the supply for part of the EPDM resources was still tight.

Due to the annual maintenance and the shutdown of upstream units, part of domestic and overseas EPDM units stopped operation, including PetroChina Jilin Petrochemical, Ningbo SK, Arlanxeo Changzhou, Kumho, JSR, etc. Only the EPDM unit at Arlanxeo Changzhou resumed production in the end of May, and the rest would restart in H2 June.

Remark: The capacity of line B at PetroChina Jilin Petrochemical was 25kt/a and was not planned to restart in the short term. It may be scheduled for modification and upgrade within the year.

After the restart, the supply at part of the manufacturers will return to normal in the end of June or mid-July as the overall inventory level was low. In addition, few EPDM resources from JSR were consumed in China, therefore the unit status of JSR was not likely to influence China’s market.

The resources from ExxonMobil and Dow will remain tight in the short term. The domestic and overseas supply in the off-grade EPDM market will be limited.

Arlanxeo increased the prices of Keltan products.

On June 11, Arlanxeo’s official website announced that on June 18, 2018, the price of Keltan (EPDM) products would be raised by €125/mt in Europe, the Middle East, and Africa, and by $150/mt in Latin America and other regions respectively. China’s market was not on the list of price rise for the time being.

According to market sources, part of the overseas EPDM manufacturers preferred to sell their products to the more favorable European and American market, but they still guaranteed to satisfy the consumption volume in China. The supply volume to China were not reduced despite the decreased profit level. There is a possibility that the higher prices in other markets may drive up China’s market.

China’s EPDM market is mainly driven by the fundamentals. The demand will be tepid during slack season which is from June to August. Additionally, there will be some uncertainties in the supply side of the coming market. Therefore, players mostly hold wait-and-see attitude, and the EPDM prices may appear stable in the short term.