Since the beginning of May, the domestic butadiene rubber market has exhibited a trend of initial surges followed by a subsequent retreat. As of May 12, the mainstream quotation for BR9000 in the East China region had fallen to 15,650 RMB/ton—a decline of 3.40% compared to the 16,200 RMB/ton recorded at the start of the month, and a drop of 4.16% from the month's high of 16,330 RMB/ton.
During the short holiday break in early May, market trading came to a standstill, and butadiene rubber prices remained temporarily stable. Following the conclusion of the holiday, however, prices gradually came under pressure and weakened as production capacity on the supply side was released. Lacking sustained upward momentum, the market as a whole has settled into a pattern of volatile decline. As of May 12, quotations for Daqing, Yangzi, and Qilu brand butadiene rubber in East China ranged between 15,600 and 15,850 RMB/ton, with market transactions driven primarily by purchases to meet immediate, essential needs.
Increased output on the supply side stands as one of the core factors driving the market's current weakness. As production margins for butadiene rubber gradually recovered from earlier lows, several production units that had previously been idled or operating at reduced loads have successively restarted, leading to a significant increase in the industry's capacity utilization rate. As of May 7, the weekly capacity utilization rate for the domestic high-cis butadiene rubber industry reached 54.87%, marking a substantial improvement compared to the end of April.
On the cost side, prices continued their downward trend, further eroding the cost-based support for butadiene rubber. According to the SunSirs Commodity Market Analysis System, the price of butadiene—a key raw material—stood at 12,400 RMB/ton as of May 12, representing a 6.06% decline from the 13,200 RMB/ton recorded at the beginning of the month.
Weakness on the demand side has exerted a distinct drag on market performance. Since the start of May, domestic tire manufacturers have experienced a decline in operating rates due to production shutdowns during the May Day holiday, a reduction in export orders, and an accumulation of finished product inventory. As of May 8, the operating rate for semi-steel tires among domestic manufacturers hovered around 48%, while tire manufacturers in the Shandong region saw their operating rate for all-steel tires settle around 49%. Downstream factories have demonstrated weak purchasing intent, largely limiting their procurement to restocking for immediate operational needs; this insufficient demand support for butadiene rubber has further exacerbated the market's existing supply-and-demand imbalance.
From a fundamental perspective, the butadiene rubber market is expected to maintain a volatile yet generally weak trajectory in the short term. On the supply side, production facilities continue to resume operations, leading to gradually mounting pressure from inventory accumulation. On the demand side, tire plant operating rates are recovering slowly, offering only limited support in terms of essential demand. Regarding costs, butadiene prices are unlikely to experience significant fluctuations.
Comprehensive Forecast: In the short term, the market is highly likely to fluctuate within a low range, halting its decline and stabilizing. A potential rebound hinges on two factors: 1) the spread turning positive; and 2) a strengthening of butadiene prices or a substantial increase in tire plant operating rates.
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