Quarterly Update on Global Polybutadiene Rubber (PBR) Market
For the Quarter Ending June 2021
North America
The downstream activity picked up as the industrial Infrastructure in the US Gulf region recovered from the devastating impact of winter storm Uri. Despite some eases on the supply side, the regional Polybutadiene Rubber (PBR) market still witnessed short availability of monomer Butadiene, which further hindered the production. Several BD producers in the US Gulf region were struggling to operate at normal rates with offered prices as high as 70% quarter-on-quarter. PBR demand was exceptionally high from the downstream tire industries as the sentiment to replenish the inventories were strong among the buyers. Price of Polybutadiene Rubber observed an uptrend since the start of the second quarter with FOB Texas discussion settling at USD 1788 per tonne in June.
Asia pacific
During the second quarter of 2021, the supplies of Polybutadiene Rubber remained balanced as operating rates at several manufacturing plants picked up to meet the downstream end use demand, but some constraints were witnessed amid the May Day holidays in China. Surge in consumption of natural rubber was seen negatively impacting the Polybutadiene Rubber market in China. Demand was consistent from the downstream tire sector, and better offtakes were reported with the rebound in the construction activities. The pricing trend of PBR stabilized early in the second quarter when FOB Qingdao settlements were assessed at USD 2000 per tonne in April. The uptrend was supported by low inventory levels of the feedstock Butadiene in South Korea. However, some expressed hopes that feedstock supplies were anticipated to improve in near term as the several Chinese Butadiene capacity expansions are lined up in the second half of 2021.
Europe
During Q2 2021, Polybutadiene Rubber (PBR) supplies improved due to the increased operating rates at several manufacturing facilities however high export demand from the US put significant pressure on the European Polybutadiene Rubber market. Demand surged as most USA buyers preferred the European shipments over Northeast Asian cargoes due to lesser freight charges and high import duties over the Chinese origin materials. PBR Offtakes surged from the downstream construction and automotive sectors. The pricing trend in the European market was buoyed by the tight supply and high demand.
For the Quarter Ending March 2021
North America
During the first quarter, synthetic rubber supplies in the North American region were hit by turnaround at major feedstock manufacturing plants due to extreme freeze weather conditions in the US gulf region that hindered the production levels various producing belts. As major players declared force majeures, around 50% of the elastomer production was hit by the winter storm. However, the demand showed recovery as the consumption improved from the automotive sector. Arlenxeo delivered voluminous consignments of PBR to the Goodyear and Ceat respectively, with FOB prices hovering at USD 1600/ton- USD 1750/ton in March. Whereas the April delivery FOB charges were announced at USD 1640/ton to USD 1720/ton varies according to the grade.
Asia-Pacific (APAC)
The supplies of Polybutadiene rubber (PBR) in Q1 2021 improved as compared to previous quarter, with the addition of new facilities is China, confirmed with the required availability of monomer Butadiene. Moreover, several plants in the northeast Asia ended their scheduled turnarounds in the first half of Q1. However, the demand remained balanced due to recovering automotive sector, but the resurgence of COVID in some economies towards the end of the quarter kept the market cautious in the southwest region. India imported significant quantities of PBR from the US taking quarterly average of PBR in India to USD 1133/tonne in February.
Europe
PBR supplies were tight due to reduced import from the US, amid severe weather conditions, followed by limited availability of the feedstock Butadiene as larger volumes were exported towards the Asian region. However, the demand remained balanced from the improved offtakes from the recovering automotive sector. With a larger portion of the Butadiene getting diverted towards the production of styrene butadiene rubber (SBR) in the European region, PBR supplies remained constrained for a larger part of the quarter.
For the Quarter Ending December 2020
Asia-Pacific (APAC)
Price of Polybutadiene Rubber (PBR) in the Asian market surged amid tight feedstock supplies in H1 of Q4, meanwhile later in the quarter, upstream supplies were heard easing to an optimum level. An unexpected shutdown at China’s Sinopec Zhongke’s new 120 KTPA Butadiene unit created hindrance in the raw material availability. In the first half of the quarter, PBR prices spiked in response to firming raw materials and tight supply situation. With producers directing their supplies largely in the automotive sector, Chinese PBR producers reported renewed pressure over the production margins following the price spike. India’s RIL revealed its investment plan of setting up a PBR Plant at Panipat Naphtha Cracker Complex, that will be completed in 2022. Tracing the upsurge in price of the feedstock and favorable demand prospects, price of PBR maintained an average of USD 1211/ton and USD 1160/ton in the Indian markets.
Europe
Abrupt spike in the feedstock rates in the Asian and North American regions, boosted the PBR export opportunities by the European countries. Meanwhile the feedstock (Butadiene) supply remained below average during Q4. Traders reported that high seasonal demand for Ethylene and Propylene during the quarter limited the crude C-4 feedstock availability. PBR spot prices in the European market surged as strong competition among traders and increased demand for the exports amid supply restrictions spiked the product cost of Asian and North American regions.
North America
In the first half of Q4, BASF Total restarted its US Port Arthur, Texas associated Butadiene (BD) unit after an unplanned turnaround in June. Increased demand from the PBR sector and increasing production rates were the key factors responsible for the increment in BD sales volume during Q4. Abrupt surge in the feedstock significantly affected the production margins of the regional PBR producers. While demand outlook turned favorable due to recovery from the hurricane related disruptions, resurgence in offtakes by the tire producers kept the prices afloat.
