China EPDM Market Expected Stable-To-Rising on Supply

SCI99 Edit at: 2017/9/7 13:39:15
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China’s EPDM market been largely stable since May. Recently, prices of other synthetic rubber were in an uptrend, but EPDM prices remained unmoved. Only offers for some grades trended up on the tight supply. The production of EPDM dropped as some units were shut down for maintenance. Resources of imported EPDM remained tight. Besides, end demand for EPDM was stepping into the traditional peak season. Thus, most players were bullish on China’s EPDM market in the coming period. 

1. Supply of some grades was tight

1.1 EPDM running status in China

Unit: kt/a

Company

Capacity (kt/a)

Unit status

PetroChina Jilin Petrochemical

20 (Line A)

RS* in early August and SD* on August 18

25 (Line B)

SD*

40 (Line C)

Line C1 SD* on August 18; Line C2 SD* in late August

Shanghai Sinopec Mitsui Elastomers

75

RS* on August 13

Ningbo SK Performance Rubber

50

SD* on August 1

Remarks: OR = operating rate; TA = planned turnaround; RS = restart; FL = full load; SD = shutdown. The unit status at ARLANXEO is not included as market sources are in chaos.

Besides the high inventory level at producers and the scheduled turnaround plans, the operating rate of EPDM units in China was also affected by the environmental measures. By August 31, the inventory at PetroChina Jilin Petrochemical was at the low end, and other EPDM producers maintained a passable inventory level. 

1.2 US-origin resources were reduced

The total import volume of EPDM was 28,500mt in June and July, down by 11.17 year-on-year. China imported 123,300mt of EPDM from January to July, up by 9.71% year-on-year.

2017 Jan–Jul China’s EPDM Import Origin Analysis

Origin

Import volume (mt)

M-o-m change

U.S.

48,104.61

-3.59%

South Korea

23,645.33

+8.91%

Japan

16,513.09

+14.98%

France

12,788.40

+26.95%

Saudi Arabia

8,784.07

-

Holland

7,055.29

-24.19%

Italy

1,767.25

+44.18%

Taiwan Area

1,395.82

+40.60%

Germany

590.32

-79.79%

Brazil

222.75

-42.79%

Belgium

216.00

+111.84%

As show above, the import volume from US, Holland, Germany and Brazil dropped month-on-month, largely as the units were shut down and China’s EPDM out at ARLANXEO increased. Besides, Hurricane Harvey made landfall on the north coast of Mexico Gulf. Consequently, some EPDM units in U.S. were shut down, and the delivery of some shipments was delayed. Dow’s spot cargoes may gradually decrease on the tight supply.

2. End demand recover slowly

EPDM was widely used in automobile industry. Some auto parts producers said: “The overall orders in August improve somewhat from last month. It will be the peak season in September, however, it is uncertain whether we can maintain normal production as the environmental production inspection is so strict. ”

3. EPDM prices may trend up

The supply is tight in China’s EPDM market. Some EXW prices of EPDM may witness an upward adjustment next month. Besides, the trading volume of some grades is on the increase, and some units are planned to take an overhaul, providing some support to the EPDM prices to mount up. Players mostly maintain stable prices and adopt a wait-and-see stance. 

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