Oil-Extended SBS: Supply Decreased in August

Oil-Extended SBS:  Supply Decreased in August

In August 2019, there were six oil-extended SBS producers in China, and five of them were samples. Therein, two producers were located in East China, two in South China and one in Northwest China.

China’s oil-extended SBS supply volume declined in August.

According to SCI’s statistics, in August 2019, China’s oil-extended SBS monthly output was 16.3kt or so, down 14.21% M-O-M and down 18.5% Y-O-Y, mainly as all lines at PetroChina Dushanzi Petrochemical were shut down for maintenance from July 20 for 50 days. The company will restart the SBS unit around September 17. Other producers were under normal operation. One line at Sinopec Maoming Company was converted to produce road modification-used SBS grades in H1 August. Sinopec Maoming Company controlled the sales, so the spot supply was tight. Heading into H2 August, the supply was released. Huizhou LCY Elastomers cut the sales in H2 August, and the resources at traders were limited.

In H1 August, the butadiene prices at Sinopec kept rising. PetroChina Dushanzi Petrochemical’s resources were insufficient, and Sinopec Maoming Company controlled the sales. Thus, oil-extended SBS ex-works prices went up, but the increment was limited on the whole. In H2 August, Sinopec Maoming Company carried out its sales plan, and the low offers appeared in South China. Downstream users were prudent in procurement, dragging down the increase in the prices of other oil-extended SBS grades. At the end of August, the delivered prices of oil-extended SBS F875 in South China closed at RMB 11,200-11,300/mt, up 2.74% M-O-M. The prices of 171E in East China closed at RMB 11,200-11,300/mt, up 2.97% M-O-M.

The supply may increase in September with the operation of PetroChina Dushanzi Petrochemical’s unit.

In September 2019, China’s oil-extended SBS monthly output will be 18kt or so. Sinopec Baling Company and Sinopec Maoming Company will reduce the output in September. However, in H2 September, the unit at PetroChina Dushanzi Petrochemical will resume the production, and the unit at Ningbo Changhong Polymer Scientific and Technical will run steadily. Thus, the supply will increase M-O-M. China’s oil-extended SBS market will usher in the traditional peak season, while the downstream consumption is slow currently. Moreover, the low-priced resources flow into the market in H2 August. Thus, oil-extended SBS market will be stable in September.

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