Oil-Extended SBS Market Price to Fluctuate Downwards Without Favorable Factors
Snapshot: In November, the oil-extended SBS market price trended down. Affected by the fall in cost and weak demand, major suppliers decreased EXW prices in succession, and the market price slid accordingly. In the short term, the oil-extended SBS market price is expected to fluctuate downwards without favorable factors.
In November, the oil-extended SBS market price began to fall. Up to November 14, the delivered price of F875 in the Fujian market was RMB 11,550/mt, down 3.35% from October 31. The reasons for the decrease were as follows. On the one hand, the operating rate at downstream TPR plants was relatively low. They consumed feedstock slowly. The tepid demand weighed on the oil-extended SBS price. On the other hand, major suppliers faced high pressure of selling goods. Particularly, the market prices of some major oil-extended SBS grades were increasingly lower than EXW prices. Suppliers decreased their EXW prices of oil-extended SBS.
The prices of major feedstock trended down, leading to a slight fall in SBS cost.
In November, the market price of major feedstock butadiene edged down. By November 10, the weekly average price of butadiene in Jiangsu-Zhejiang market was RMB 9,300/mt, down 1.9% W-O-W. The market prices of downstream products decreased, dragging down the butadiene price. The price of feedstock styrene also dropped in November. By November 10, the styrene price in Jiangsu market was RMB 8,614/mt, down 2.7% W-O-W. The international crude oil price leveled down, curbing the styrene price.
There was no favorable factor in supply.
From the perspective of supply, the oil-extended SBS resources were ample in the market, and few producers cut production. PetroChina Dushanzi Petrochemical had a plan of cutting production. The resources of T171G were scant in the market, but the resources of other grades were sufficient. Thus, the supply of oil-extended SBS failed to bolster the oil-extended SBS prices. As for demand, the orders at TPR plants were scarce. The operating rate was around 30%. TPR plants mainly consumed the previous inventory and purchased oil-extended SBS steadily. The tepid demand weighed on the bottom of oil-extended SBS prices.
SCI reckons that the market prices of oil-extended SBS may continue to fluctuate downwards in the short term.
The market prices of oil-extended SBS may continue to fluctuate downwards in the short term. In terms of cost, the prices of butadiene and styrene are expected to slide, limitedly bolstering the oil-extended SBS market. As for fundamentals, the demand for oil-extended SBS is predicted to be weak. The operating rate at downstream shoe material plants is likely to improve limitedly. There may be no favorable factor in fundamentals bolstering the oil-extended SBS market. SCI reckons that the oil-extended SBS market price is predicted to fluctuate downwards. Players are advised to pay attention to changes in the butadiene price.
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