The market of BR slightly declined in October. According to the Commodity Market Analysis System of SunSirs, as of October 30th, the market price of BR in East China was 12,820 RMB/ton, a decrease of 10.94% from the beginning of the month at 13,280 RMB/ton, and a decrease of 4.32% from the month's high of 13,880 RMB/ton.
In the first half of the month, the price of raw material butadiene slightly decreased, and the cost support for BR weakened. Downstream tire factories started operating steadily, but tire companies' early stocking and post holiday procurement were flat. In the face of weak demand support for BR, the factory price of BR decreased, and the BR market weakened; In the second half of the month, the price of raw material butadiene was pushed up due to the impact of supply, and the cost support for BR was strengthened. In addition, downstream demand support led to a narrow consolidation of the BR market. As of October 30th, PetroChina Northeast Sales Company's Daqing Shunding Northeast Warehouse has raised its price by 12600 RMB/ton. The domestic market quotation range for two barrels of oil BR is around 12,600 to 13,100 RMB/ton, and the quotation for private enterprise BR is between 12,200 to 12,400 RMB/ton.
In October, the overall construction of BR started at a low level in the early stage and slightly increased in the later stage. As of the end of the month, the construction of BR was around 7.2%.
In October, the price of butadiene increased significantly, and the overall cost support for BR strengthened. According to the Commodity Market Analysis System of SunSirs, as of October 30th, the price of butadiene was 9,275 RMB/ton, an increase of 6.49% from 8,710 RMB/ton at the beginning of the month. The short-term supply side has been significantly boosted, coupled with a strong increase in supplier prices, making it difficult for the butadiene market to have low-priced supply sources to supplement.
The natural rubber market rose in October, which had a slight impact on BR. According to the Commodity Market Analysis System of SunSirs, as of October 30th, the price was at 13,150 RMB/ton, an increase of 4.86% from 12,540 RMB/ton at the beginning of the month.
Demand side: The start of tire production in October is basically stable, but the main focus is on maintaining consumption inventory for rubber. New orders are cautiously purchased, and market transactions are flat. Demand is relatively weak in the face of stable rubber support. It is understood that as of late October 2023, the operating load of all steel tires for rubber tire enterprises in Shandong region is 6.5%; The operating load of semi steel tires for domestic rubber tire enterprises is 7.3%.
SunSirs analysts believe that a significant increase in raw material prices will support the cost of BR. Currently, downstream construction is just in need of rubber support, and BR construction is slightly higher. It is expected that the spot market of BR will mainly fluctuate and consolidate in the short term.
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