Since the geopolitical conflict in the Middle East, the domestic styrene butadiene rubber market has surged for a month and then slightly declined, with cost driven as the core theme. According to data from SunSirs, the mainstream price of styrene butadiene 1502 in early March was about 13,140 RMB/ton, and as of April 10th, the price was 17,400 RMB/ton, a cumulative increase of 32.40%, a decrease of 4.04% from the highest price of 18,133 RMB/ton at the end of March.

The cost side is the core driving force behind the increase: the geopolitical conflict in the Middle East has pushed up international crude oil prices, driving up the prices of naphtha and ethylene cracking chains across the board. The raw material butadiene increased from 9993 RMB/ton to 16,666 RMB/ton, an increase of 66.78%, due to the decrease in overseas cracking load, the increase in export orders, and the tight domestic spot market; Styrene rose by 33.32% synchronously, and the production cost of styrene butadiene rubber increased significantly. External raw material enterprises suffered losses and were forced to concentrate on raising factory prices, with a strong willingness to raise prices.

The tightening of the supply side exacerbates the supply-demand gap: In March, the domestic styrene butadiene rubber plant experienced an increase in maintenance due to the inverted cost of raw materials and a decrease in operating rates, resulting in an industry operating rate of around 74%, supporting the continuous upward movement of spot prices.

Demand side rigid demand support: The downstream tire, shoe material, and waterproofing membrane industries are in the traditional peak season, but high prices suppress procurement, mainly relying on small order rigid demand and on-demand procurement, limiting the room for growth. As of the week of April 3rd, the operating load of semi steel tires in domestic tire companies was 78%; The operating load of all steel tires in Shandong tire enterprises is 72%.

Overall, there is still support on the cost side at present, but the geopolitical conflict has initially cooled down, and the high price of styrene butadiene rubber has slightly decreased; In the medium term, there may be a turning point from rising to falling in the next 1-2 months, with the risk mainly due to cost changes caused by geopolitical conflicts in the Middle East.

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