August 28 news
In August, the rubber sector saw across-the-board price increases, with synthetic rubber experiencing a greater price rise than natural rubber. Natural rubber prices were strongly supported by cost factors, as rubber tapping was hampered by the rainy season in Southeast Asia. Meanwhile, international crude oil prices remained volatile at high levels due to ongoing risks from the Middle East conflict, providing continued cost support for synthetic rubber raw materials and chemical products such as carbon black, thereby bolstering synthetic rubber prices. However, downstream tire demand is in the traditional off-season, which is restraining the extent of the rubber sector’s upward movement.
| Variety | August 1 | August 28 | Monthly Change Rate |
|---|---|---|---|
| Natural Rubber SCRWF | 16,483 | 17,958 | 8.95% |
| Butadiene Rubber | 13,450 | 14,710 | 9.37% |
| Styrene-butadiene Rubber 1502 | 13,441 | 14,741 | 9.67% |
| Nitrile Rubber | 16,725 | 17,450 | 4.33% |
| Butadiene | 10,016 | 12,166 | 21.46% |
| Styrene | 8,690 | 9,040 | 4.03% |
| Acrylonitrile | 11,133 | 11,433 | 2.70% |
| Carbon Black N220 | 8,240 | 9,071 | 10.09% |
On the supply side: Natural rubber production in Southeast Asia has entered its peak tapping season, though rainfall disruptions have affected tapping activities. Thailand’s cup lump rubber prices remain high at 70 Thai baht per kilogram. Total natural rubber inventories at Qingdao Port stand at 631,500 tons, down 1.65% from the previous month. Upstream butadiene for synthetic rubber has risen driven by crude oil prices. In China, the operating rate for cis-1,4-polybutadiene rubber stands at 74-75%, while the operating rate for styrene-butadiene rubber is between 68% and 71%. Some plants are undergoing maintenance, so inventory pressure remains relatively mild. Carbon black prices have risen due to higher costs of chemical feedstock, thereby increasing the overall production costs of tires.
On the demand side: Tires are entering the traditional off-season. For all-steel tires, the operating rate stands at 64.15%, while for semi-steel tires, it’s at 65.81%. Compared to the same period last year, the operating rate for semi-steel tires has declined by 6.06%. Finished tire inventories remain relatively high, and companies are primarily adopting rigid-demand procurement strategies, showing weak willingness to replenish stocks significantly and exhibiting clear resistance toward high-priced raw materials. Demand for non-tire products remains stable, making it difficult to offset the sluggish performance of the tire market. Tire manufacturers are adjusting the blending ratios of natural rubber and synthetic rubber based on price differentials to mitigate cost pressures.
Market Forecast: September marks the start of the tire stocking window, and demand may show marginal improvement. For natural rubber, close attention should be paid to rainfall patterns in Southeast Asia; any weather disruptions will continue to provide price support. However, if tapping volumes increase significantly, there could be a risk of price corrections. Synthetic rubber is highly dependent on butadiene and crude oil costs. Should risks from the Middle East conflict persist, synthetic rubber prices could continue to rise, supported by cost factors. In the later period, it will be crucial to monitor tire production starts in September, crude oil prices, weather conditions in key producing regions, and overall macroeconomic sentiment.
