How Will China PBR Supply Change with New Unit on Stream?
Snapshot: On April 25, 2023, the 100kt/a NiBR/NdBR unit at Zhejiang Petroleum & Chemical went into production. The unit is producing HCBR 9000 steadily at present. From the perspective of China’s current PBR supply structure, private capacity accounts for a higher proportion of the total, and the PBR supply in the market continues to increase.
China’s PBR capacity layout analysis
As for the regions, the layout of China’s PBR enterprises was generally in line with that of China’s manufacturing industry. The capacity is mainly concentrated in North China and East China, which takes up over 60% of the total. Meanwhile, tire enterprises, the largest downstream users of PBR are also distributed in North China and East China, especially in Shandong. North China and East China were the distributors of both the PBR capacity and tire consumption. (According to the sales patterns of PBR, we divide Shandong into North China and Fujian into South China.) Since 2023, two PBR units with a capacity of 120kt/a in Zhejiang went into production, leading to an increase in the capacity of East China.
From a perspective of province, China’s PBR producers were mainly distributed in Shandong, Jiangsu and Heilongjiang in 2022. The capacity in Shandong accounted for around 32% of the total, ranking first. As the PBR units at Ningbo Changhong Polymer Scientific and Technical and Zhejiang Petroleum & Chemical came online, the PBR capacity in Zhejiang took up a higher proportion of the total than that in Jiangsu and Heilongjiang, ranking second.
In Q2, 2023, China’s PBR units may take maintenance intensively. As for state-owned enterprises, the unit at Nanjing Yangzi Petrochemical and Rubber is expected to remain offline. The unit at PetroChina Daqing Petrochemical is scheduled to take overhauls in June. Other units will change slightly. As for private enterprises, TSRC-UBE (Nantong) Chemical Industrial shut its unit for turnaround in April. Xinjiang Lande Fine Petrochemical and Hipro New Material Technology shut their units for maintenance in early April and may restart them in mid or late May. Zhenhua New Material shut down its unit for maintenance in late April and is expected to restart it in mid-May.
The output of China’s HCBR is estimated at 93.5kt in May, up 3.66 M-O-M and up 4.24% Y-O-Y. Although many units are under maintenance intensively at present, the PBR supply is relatively ample in the market and enough for downstream replenishment. On April 25, the 100kt/a NdBR or 70kt/a NiBR unit at Zhejiang Petroleum & Chemical came on stream. It produces HCBR 9000 currently, leading to a 6kt increase in the monthly HCBR 9000 output.
As seen from the resources flow, the PBR output for direct supply accounts for about 70%, while that for spot circulation takes up less than 30%. However, Zhejiang Petroleum & Chemical produces PBR, providing an intensive and large increase in the PBR supply in the market. The spot PBR supply in the market may reach a new balance.
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