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SunSirs: Light Trading Volume, Butadiene Rubber Prices Fall in February (Feb.1-29)

March 02 2020 10:12:02     SunSirs (Daisy)

The butadiene rubber market weakened in February. In early February, the price of butadiene rubber in 11350 yuan/ton, and the price at the end of the month in 9850 yuan/ton. The overall end of the month compared to the beginning of the fall of 13.22%.

First, a sharp drop in crude oil dragged down butadiene. The price of butadiene in China has dropped sharply, from 8,056 RMB / ton at the beginning of February to 6,223 RMB/ ton at the end of February, down 22.75% overall.

Secondly, affected by "COVID-19" epidemic prevention and control, especially in the first and middle of February, domestic traffic control is relatively strict. The flow of production materials is not smooth. On the other hand, the resumption of production of domestic downstream enterprises have been delayed. Post-holiday demand is much less than in previous years. 

By the middle of February, the rate of return to work in the downstream tire industry in the vicinity of 30 % and return to work rate of enterprises also lowers than 10~30%. Therefore, in February the overall volume of light, forming a negative butadiene rubber. In late February, with the increase in the number of enterprises returning to work, the recovery rate reached 60%~ 70%, but the recovery rate is still relatively low, basically within 50%.

Finally, in early February, the overall rate of butadiene rubber in about 70 percent. The operating rate of PetroChina and Sinopec is around 70-80%. The installation of private enterprises starts at 50-60%. In the later period, in order to cope with the inventory pressure caused by traffic and the impact of resumption of work, the load of some butadiene rubber enterprises has been reduced to some extent to relieve the downward pressure of butadiene rubber.

Market Forecasting 

On the one hand, the price of raw material butadiene declined, coupled with the current low international crude oil prices, raw materials to butadiene rubber form support. On the other hand, the downstream tire start growth is still slow. It is expected that the late butadiene rubber prices will continue to be weak consolidation.

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