Weakening supply and demand, butadiene rally ends
TIME：
2020-12-12
Figure 1 The trend of butadiene market in 2020
Source: Longzhong Information
As we all know, the domestic butadiene market began to fluctuate upwards in July. In the second half of October, it was boosted by factors such as the maintenance of Wuhan equipment, the release of new domestic production capacity that was lower than expected, and the intervention of funds in natural rubber futures. The market has skyrocketed; In November, the market was driven by news of accidental parking of devices in South Korea and Japan, and the market was on a long-term upward trend.
With the rise of butadiene market, the negative demand of downstream demand gradually accumulates. At the same time, the supply side of the domestic and foreign markets has a negative performance, and the contradiction between supply and demand is prominent. Butadiene market has repeatedly failed to hit the 10,000 yuan mark. The month is coming to an end.
Figure 2 Comparison of the operating rate of the butadiene industry in 2019-2020
Source: Longzhong Information
According to the statistics of Longzhong Information, after the market rose in July, all domestic oxidative dehydrogenation units were restarted in October. Although the Wuhan petrochemical plant was shut down during this period, Baolai Petrochemical started up in August, Quanzhou Petrochemical started up at the end of September, and Zhongke Petrochemical started up at the end of October. It is an indisputable fact that the operating rate of the industry has been increasing month by month, and the increase in supply has become an indisputable fact.
Figure 3 Comparison of operating rates of major downstream industries of butadiene in 2020
According to the data survey on the operating rate of Longzhong Information Industry, the rapid increase in the butadiene market in the second half of 2020 has caused downstream profits to be damaged. There is a clear decline. In November, the operating rate of the butadiene rubber industry was 68.76%, a decrease of 6.58% from the previous month; the operating rate of the styrene-butadiene rubber industry was 65%, a decrease of 4.06% from the previous month; the operating rate of the SBS industry was 54.2%, a decrease of 6.39% from the previous month.
In December, on the one hand, South Korea’s Lotte plant restarted, and on the other hand, Yantai Wanhua and Shandong Huayu’s output was gradually released; in the second half of the month, the Wuhan petrochemical plant restarted, and its 60,000-ton/year new plant for capacity expansion was put into production. However, dragged down by the poor profitability of the downstream, it is difficult for the demand side to show signs of rapid improvement. On the whole, the market supply and demand continued to be weak. When the positive factors that led to the previous rally of funds and installation surprises gradually dissipate, the market will decline.
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