Q2 SBR Units to Shut for Maintenance, Bolstering SBR Price
Snapshot: Up to end-February 2023, there have been 11 ESBR enterprises in China, with the capacity of 1,460kt/a in total. Samples of this research covers all China’s ESBR enterprises, including 2 ESBR enterprises with the capacity of 350kt/a in North China, 4 with the capacity of 470kt/a in East China, 2 with the capacity of 150kt/a in South China, 2 with the capacity of 340kt/a in Northeast China and 1 with the capacity of 150kt/a in Northwest China.
In February, the operating rate of ESBR industry trended down M-O-M.
According to SCI, the monthly average operating rate of China’s ESBR units was 70.4% in February 2023, down 2.76% M-O-M. The operating rate at Shen Hua Chemical Industrial, Nanjing Yangzi Petrochemical and Rubber, PetroChina Lanzhou Petrochemical and PetroChina Fushun Petrochemical decreased somewhat. Zhejiang Vitile Rubber ran its unit at a higher load. Other ESBR units were under normal production. Overall, the operating rate of SBR units moved down M-O-M.
According to SCI, the operating rate of the SBR unit at Zhejiang Vitile Rubber rose M-O-M. The operating rate at Shen Hua Chemical Industrial, Nanjing Yangzi Petrochemical and Rubber, PetroChina Lanzhou Petrochemical and PetroChina Fushun Petrochemical decreased somewhat M-O-M. The operating rate at Sinopec Qilu Company and PetroChina Jilin Petrochemical trended flat. The increment in feedstock butadiene and styrene prices was higher than that in SBR prices, leading to lower profit of SBR industry. Considering the stable cooperation with clients, some SBR enterprises purchasing feedstock butadiene outside ran their units at a steady load. Overall, there were 4 enterprises cutting the operating rate and 1 raising up the operating rate in February. Other units ran steadily. The SBR units at Fujian Fuxiang Chemical and Tianjin Lugang Petroleum Rubber remained shut.
China’s ESBR market price went up in February, mainly driven by the cost. However, the price of Shanghai natural rubber futures dipped and stayed lower than that of SBR for a long time, dragging down the SBR market. Besides, the end tire players showed poor interest in replenishment after resuming production, so the SBR price fell back somewhat in a period. In February, the gross profit of China’s ESBR industry was RMB -670.1/mt, down RMB -131/mt M-O-M. This month, the monthly average price of SBR trended up. Meanwhile, the monthly average prices of butadiene and styrene rose notably. The profit transferred to the feedstock, reducing the marginal benefits at China’s ESBR enterprises.
According to SCI, the operating rate at Shen Hua Chemical Industrial is scheduled to rise in March 2023. Other SBR units are predicted to be under normal production. The operating rate at PetroChina Fushun Petrochemical, Zhejiang Vitile Rubber and Hangzhou Yibang Rubber is expected to slide, which may not offset the increment in the overall operating rate. The average operating rate of China’s SBR industry is estimated at 72.3% or so in March, up 2% M-O-M.
The SBR unit turnaround at Nanjing Yangzi Petrochemical and Rubber was postponed from April to May. The duration may be around 45 days. In June, PetroChina Lanzhou Petrochemical is scheduled to shut its unit for maintenance for around 50 days. The total SBR supply losses caused by maintenance in Q2 are estimated to reach around 24.5kt. The intensive turnarounds of SBR units in Q2 will possibly bolster the SBR price in a short term.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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