Cost Support: Butadiene Rubber Market Prices Rise Sharply

December 22nd News

Recently (December 1–22), the market for cis-1,4-polybutadiene rubber has seen a significant upward trend. According to the commodity price analysis system, as of December 22, the price of butadiene rubber in the East China region stood at 11,090 CNY per ton, up 4.03% from the beginning-of-month price of 10,660 CNY per ton. The rising price of the feedstock, butadiene, has strengthened the cost support for cis-1,4-polybutadiene rubber. Meanwhile, most of the previously shut-down production units have now resumed operations, leading to a slight increase in the operating rate of cis-1,4-polybutadiene rubber plants. On the downstream side, tire production has slightly declined, providing only moderate support for the rigid demand for cis-1,4-polybutadiene rubber. Overall, the fundamentals of cis-1,4-polybutadiene rubber remain relatively weak. As of December 22, mainstream quotes for cis-1,4-polybutadiene rubber in the East China region—produced by Qilu, Daqing, Sichuan, and Yangzi—ranged from 11,000 to 11,200 CNY per ton.

Recently (December 1-22), the butadiene external market has been firm, with China's supply prices gradually increasing, leading to a rise in the domestic butadiene market prices and stronger cost support for polybutadiene rubber. According to the commodity market analysis system, as of December 22, the price of butadiene was 7,700 CNY/ton, an increase of 10.26% from 6,983 CNY/ton at the beginning of the month.

Recently (Dec 1 to Dec 22), the operating rate of polybutadiene rubber facilities in China has slightly increased to around 76%. Later, the Maoming Petrochemical plant, which is shut down for maintenance, is scheduled to restart in January.

Demand Side: Recently (Dec. 1–Dec. 22), downstream tire production has slightly declined, providing solid support for the butadiene rubber market. As of December 19, Chinese tire companies’ semi-steel tire production capacity utilization rate stood at around 71%; in Shandong Province, full-steel tire production capacity utilization reached approximately 63%.

Market Forecast: From a fundamental perspective, analysts believe that in the short term, the cost support for cis-1,4-polybutadiene rubber will continue. However, supply and demand remain relatively weak. Overall, it is expected that cis-1,4-polybutadiene rubber prices will mainly fluctuate and consolidate in the near term.