HCBR Output to Hit a New Low

China’s HCBR output in May inched down from last month and last year.

The output in May was 68.1kt, down 2.4% M-O-M and down 2% Y-O-Y. The total output from January to May was 367.4kt, up 8.6% Y-O-Y. The production cost further weighed on the plants. In May, the EXW price of HCBR increased slightly to RMB 12,681/mt. That of butadiene at Sinopec went up to RMB 11,520/mt. The spread was less than RMB 1,200/mt, increasing the cost pressure.

HCBR output in June will fall from last month and last year, which may hit a new low in H1 of 2018.

The output is estimated at 63kt in June, down 10% M-O-M and down 7.5% Y-O-Y. The units at PetroChina Sichuan Petrochemical, Zibo Qixiang Tengda Chemical and Zhejiang Transfar Chemical will restart in mid or late June. The unit at Sinopec Qilu Company will undergo the overhaul, and the loss will account for 25% of the monthly output. TSRC-UBE (Nantong) Chemical Industrial will shut down the unit in June or July. Thus, the output in June will decrease.

China’s import volume is estimated to decline.

The international HCBR prices soared to $2,000/mt, in line with the increasing prices of butadiene in the international market. The cost of imported HCBR was over RMB 16,000/mt if calculated based on the general trade mode. That was more than RMB 12,700/mt if calculated based on the processing trade with imported materials mode. Thus, the high import price of HCBR will curb the trade in June and July.