Q1, 2020 China’s PBR Export Volume Increased Greatly
In Q1, 2020, influenced by the public health event at home and abroad, tire enterprises and automobile enterprises at home and abroad suffered output reduction and production suspension. The consumption volume of PBR from end enterprises declined, and China’s PBR prices dropped to the historical lowest level. How did the PBR export market perform amid bearish atmosphere?
As seen from the chart above, in Q1, 2020, China’s PBR export volume rose sharply. In Q1, China’s PBR export volume totaled about 18.2kt, up 90.34% Y-O-Y. Reasons for the export increase were as follows: 1. China’s PBR supply was ample, but the demand was soft. Thus, exports expanded the direction of consumption for China’s PBR enterprises. 2. China’s some tire enterprises set up plants in Southeast Asia in recent years. In Q1, influenced by the public health event, some domestic tire orders were transferred to Southeast Asia, so the demand for PBR in Southeast Asia rose somewhat. At the same time, the increase in China’s export tax rebate rate gave certain support to China’s PBR export market.
In Q1, 2020, China’s PBR export volume to Thailand and Vietnam ranked first and second respectively, and the total export volume to the two countries took up 64% or so of China’s total export volume. SCI learns that the tire capacity under normal operation at abroad is mostly concentrated in Thailand and Vietnam at present. Hangzhou Zhongce Rubber, Linglong Tire and Sailun Group set up plants in the two countries, and the need of tires was the main reason for the export of PBR to Thailand and Vietnam.
In Q2, 2020, China’s PBR export market will witness bullish factors and bearish factors. On the one hand, China’s PBR supply will become looser. The feedstock butadiene prices are low, and the access to butadiene resources will be easier. Thus, the profit from producing PBR will be handsome, and most PBR producers will be under steady production, ensuring the abundant supply. On the other hand, China’s PBR prices have dropped to the historical low level, showing the price advantage. However, at the same time, as the COVID-19 spreads globally, the growth of demand from abroad will slow down, lowering the actual consumption volume of PBR to some extent. It is predicted that China’s PBR export volume in Q2, 2020 will increase Y-O-Y, but it is likely to decrease somewhat from Q1, 2020.
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