Mar Profit from Producing Butadiene Decreased MoM
Introduction: In March, the profit from producing butadiene decreased MoM. The butadiene price trended sideways after falling. The decrement in butadiene cost was narrower than that in its ex-works price, so the profit slid by 14% MoM. Profits of downstream industries showed ups and downs. Both the supply and the demand were weak. Units’ operating rates were different.
In Mar, the profitability of the butadiene industry declined MoM.
In March, the butadiene price trended sideways after falling slightly. The average production cost dropped marginally MoM, whose decrement was narrower than that in butadiene prices. On the whole, the profit from producing butadiene decreased in March. By March 31, the monthly average theoretical gross profit at butadiene enterprises via C4 extraction technology was around RMB 4,436/mt, down RMB 732/mt or 14.01% MoM, but up RMB 380/mt or 9.37% YoY. There were two main reasons caused these changes. Firstly, the butadiene price went sideways after inching down. Sinopec lowered the butadiene ex-works price from RMB 11,600/mt in early-March to RMB 11,100/mt, down 4.31%. However, the feedstock price slipped first and then rose. The monthly average cost at butadiene enterprises via C4 extraction technology was around RMB 6,740/mt in March, down 2.83% MoM compared with RMB 6,936/mt in February. The butadiene cost fell less sharply than the butadiene price.
Profits of downstream industries showed ups and downs.
In March, profits from producing PBR and ABS grew, while those from producing SBR and SBS slipped. This month, the butadiene price was range-bound after inching down. The PBR price dipped as well, but its decrement was narrower than that in the butadiene price. Thus, the profit loss was eased. The ABS price went down, but the average price of styrene, acrylonitrile, and butadiene declined as well. The decrease in costs overpassed that in ABS prices, so the profit from producing ABS increased. The SBR and SBS prices showed a downtrend, resulting in lower profits.
In March, the operating rate of SBR and SBS industries grew, and that of PBR and ABS industries inched down. With a limited drop in the average feedstock price, the cost had a limited influence on downstream industries. Some PBR and ABS units underwent maintenance, so their industry operating rates decreased marginally. Some SBR and SBS units were raised loads, so their industry operating rates increased slightly.
From the perspective of PBR, the theoretical gross profit was RMB -533.33/mt in March, up RMB 126.32/mt MoM. As March had more natural days than February, the capacity base became larger. The operating rate was 68.89% in March, down 0.83% MoM.
From the perspective of SBR, the theoretical gross profit was RMB 527.38/mt in March, down 36.58% MoM. Due to the increase in loads at PetroChina Jilin Petrochemical, the operating rate was 79.91% in March, up 0.35% MoM.
From the perspective of ABS, the theoretical gross profit was RMB 194.45/mt in March, up RMB 476.05/mt MoM. The profit of the ABS industry turned from negative to positive. Due to the slight increase in maintenance production lines, the operating rate was 66.95% in March, down 1.28% MoM.
From the perspective of SBS, the theoretical gross profit was RMB 401.9/mt in March, down RMB 52.45% MoM. This month, there were both increases and decreases in the operating rate. In general, the operating rate was 53.6% in March, up 0.6% MoM.
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