Oct China HCBR Supply will Increase
HCBR monthly output in September decreased M-O-M.
In September, China’s HCBR monthly output was 90kt or so, down about 6.25% M-O-M and up 43.77% Y-O-Y. The reasons for the M-O-M decrease were mainly as follows: As for the state-owned enterprises, the operating rate at Sinopec Beijing Yanshan Company and Nanjing Yangzi Petrochemical and Rubber inched down, and other state-owned enterprises units had no obvious changes. The monthly output at state-owned HCBR enterprises decreased by about 4.55% M-O-M. As for the private HCBR enterprises, TSRC-UBE (Nantong) Chemical Industrial restarted the HCBR unit on September 16. Hipro New Material Technology shut the unit down for maintenance from September 1 to September 6. A private enterprise in Shandong Province shut the unit down for maintenance from September 22 to September 29, and another private enterprise in Shandong Province shut the unit down for maintenance on September 30. The monthly output at private HCBR enterprises decreased by about 9.60% M-O-M.
In September, mainstream prices of HCBR rose. In H1 September, HCBR market prices kept rising, as butadiene prices and prices of NR futures at the SHFE went up. In mid-September, traders finished replenishment with HCBR prices rising to highs, and downstream plants had weak interest in replenishment. Thus, HCBR market prices dropped. In H2 September, butadiene prices rose once more, so HCBR market prices trended up. However, the downstream plants had weak interest in replenishment, and sales at high prices performed badly. By the end of September, the theoretical loss from producing HCBR was around RMB 691/mt or so, and the theoretical profit continued declining from last month.
