SBR Market Semi-Annual Review: SBR Price Registered M-Shaped Trend in H1, 2023, and to Fall After Rebounding in H2
Keywords: SBR, Price review, Seasonal fluctuation, Price forecast
Snapshot: In H1, 2023, the SBR price showed an M-shaped trend. Although the SBR units took maintenance intensively in H1, 2023, the supply failed to drive up the SBR price, mainly due to the decrease in the natural rubber price. In H2, 2023, the natural rubber price is expected to increase, leading to a rebound in the SBR price. But the SBR price may fall after rebounding.
In H1, 2023, the SBR price faced headwinds in rising.
According to SCI, the SBR market price in H1, 2023 showed an M-shaped trend, which was generally in line with SCI’s forecast in 2022-2023 China SBR Market Annual Report. In 2023, the natural rubber price trended at lows, dragging down sellers’ sentiment in the SBR market. The natural rubber price remained lower than the SBR price, weighing on the consumption of SBR. Based on the out-of-normal trend of the natural rubber price, it strongly affected the SBR market price in H1, 2023. The natural rubber price had a stronger influence on the SBR price than the supply-demand fundamentals. In H1, 2023, the average price of ESBR 1502 in North China was RMB 11,360/mt, down 7.63% Y-O-Y. By June 27, the ESBR 1502 price in North China closed at RMB 11,050/mt, up 4.25% from the beginning of 2023.
In H1, 2023, the highest price of SBR was RMB 12,050/mt on April 25. First, the feedstock butadiene price rose, bolstering the SBR price. Second, some SBR units were scheduled to take maintenance, driving up the SBR market price. However, the downstream tire industry failed to improve the demand for SBR, although the operating rate of the tire industry remained high. Dealings were conducted on rigid demand after the SBR price rose, which lacked support from demand. In May, the SBR price crashed. But the SBR output slid, underpinning the SBR price. In June, the SBR price fluctuated at lows, and the lowest price this month was higher than that of H1, 2023. The lowest price of H1, 2023 was RMB 10,600/mt on January 3. The price spread between the highest price and the lowest one was RMB 1,450/mt in H1, 2023.
The influence of supply-demand fundamentals on the SBR market price weakened in H1, 2023, while the price trends of natural rubber and butadiene directly affected the SBR market price.
Natural rubber
In 2023, the natural rubber price hovered at lows pressured by the fundamentals and macro environment. Natural rubber and SBR are substitutes in downstream application. Downstream users changed the using ratio of natural rubber and SBR according to the price spread between them and their physical properties. Therefore, the natural rubber price remained lower than the SBR price, weighing on the SBR price.
In 2023, the natural rubber price remained lower than the SBR price. The largest price spread reached RMB 1,300/mt. From the perspective of downstream cost, the value of replenishing SBR was lower than that of replenishing other feedstock. Thus, the price spread between natural rubber and SBR affected buyers’ sentiment and the market atmosphere. Downstream tire enterprises purchased SBR on rigid demand. Dealings of spot SBR slowed down, and the rise in the SBR market price was constrained. Overall, the natural rubber price remained lower than the SBR price, strongly weighing on the SBR market atmosphere in H1, 2023.
Cost
In H1, 2023, the production cost of SBR declined from the high level. The gross profit rose into positive territory in May. The butadiene price changed ahead of the SBR price, and their price trends were similar. From January to April, the butadiene price rose RMB 10,000/mt and then fluctuated at highs. The demand for SBR underperformed. But the decrement in the SBR price was minor supported by cost. In May, the butadiene price began to drop, which fell to RMB 5,900/mt. The SBR price fell to RMB 11,000/mt, which was only RMB 400/mt higher than the lowest point in H1, 2023. The butadiene price change significantly affected the SBR market price, but had little impact on the SBR supply. In H1, 2023, the output of ESBR was 527kt, down 8.39% Y-O-Y. The decline in the output was mainly because some SBR units took maintenance in H1, 2023. The cost had no direct influence on the SBR output in H1, 2023.
It is predicted that the SBR price may fall after rebounding in H2, 2023.
……
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
