The Market Trend of Butadiene Rubber Weakens and Declines

October 14, News

Recently (10.1~10.14), the butadiene rubber market in China has shown a weak downward trend. According to the commodity price analysis system, as of October 14th, the price of butadiene rubber in the East China region was 11,310 CNY/ton, a decrease of 3.08% from the beginning of the month at 11,670 CNY/ton. The price of butadiene, a raw material, has significantly decreased, weakening the cost support for butadiene rubber; the production of butadiene rubber has slightly increased; the operation rate of downstream tire factories has greatly declined during the holiday, providing weaker support for butadiene rubber. Given the weak fundamentals, the supply price of butadiene rubber was reduced after the holiday, leading to a weak and declining market price. As of October 14th, the main quotations for Qilu, Daqing, Sichuan, and Yangzi butadiene rubber in the East China region were between 11,200 to 11,500 CNY/ton.

In recent times (10.1~10.14), due to the decline in international crude oil prices and the reduction in butadiene supply prices, the price of butadiene in China has significantly decreased, leading to a drop in the cost base for polybutadiene rubber. According to the commodity market analysis system, as of October 14th, the price of butadiene was at 8,446 CNY/ton, a decrease of 4.95% from 8,886 CNY/ton at the beginning of the month.

Recently (Oct 1st to Oct 14th), the operating rate of butadiene rubber facilities in China has increased to around 70%, with expectations of a slight increase in supply pressure.

Demand aspect: Recently (October 1st to October 14th), due to the impact of the National Day holiday, the average operating rate of downstream tire manufacturers has significantly decreased, which has a negative effect on the polybutadiene rubber market. As of October 9th, the operating rate of semi-steel radial tires among Chinese tire enterprises slightly increased to around 42%; in Shandong region, the operating rate of all-steel radial tires among tire enterprises slightly decreased to about 42%.

Market Forecast: From a fundamental perspective, analysts note that downstream industries experienced a significant drop in production activity during the post-holiday period, with a slow recovery expected afterward. Meanwhile, butadiene rubber plant utilization rates saw a slight increase, but demand and supply conditions continue to weigh on market trends for the material. On the other hand, declining raw material prices are creating some downside pressure on butadiene rubber pricing. Overall, it is anticipated that the market will remain weak and consolidate in the near term.