Domestic BR prices have continued to fall since the start of June amidst intensifying market tug-of-war; whether the market has hit bottom has become a focal point for the industry. According to SunSirs data, as of June 11, the price in East China had dropped to 13,620 RMB/ton. While this remains 4.69% higher than pre-US-Iran conflict levels, it represents a 24.92% decline from the peak of 18,140 RMB/ton seen in early April.
This round of price declines is primarily driven by raw material costs; the recent sustained weakness in butadiene prices has lowered the industry's cost baseline. Coupled with spreading market pessimism, polybutadiene prices have trended downward. SunSirs' commodity analysis system shows that as of June 11, the price of butadiene stood at 10,486 RMB/ton—a 44.32% drop from the peak of 18,833 RMB/ton recorded during the Middle East conflict. Current market prices are hovering near the industry's cash cost line, with most producers operating close to the break-even point; further significant price drops would force production cuts, meaning the cost side is establishing a solid floor for prices.
On the supply side, the overall situation is one of ample availability. Domestic operating rates for BR plants remain high, and with the gradual release of new capacity, market supply is steadily increasing. For the week ending June 4, the operating rate hovered around 67%. Meanwhile, the volume of imported cargo arriving at ports has rebounded, leading to a slight accumulation of port inventories, which has somewhat dampened the potential for a spot price rebound. However, following an earlier period of concentrated selling, low-priced stock has dwindled, and the pressure from panic selling has largely dissipated.
Demand remains the key factor constraining a market rebound. June and July mark the traditional off-season for the tire industry; domestic tire plant operating rates remain low, with lackluster figures for both semi-steel and all-steel tire production. As of June 10, the operating rate for semi-steel tires among domestic manufacturers was around 70%, while the rate for all-steel tires in Shandong was approximately 68%. Enterprises are limiting purchases to immediate needs, with little appetite for restocking raw materials. Furthermore, shifting conditions in overseas trade have put pressure on tire export orders, limiting the potential for robust downstream demand.
In the short term, the price of BR is expected to fluctuate within the 13,000–14,000 RMB/tonne range as the market absorbs bearish factors. The medium- to long-term outlook hinges on two key indicators: first, whether butadiene prices can halt their decline and stabilize, thereby restoring cost support; and second, the extent of the recovery in tire plant operating rates and the pace of concentrated restocking. Until demand rebounds across the board, BR is unlikely to see a sustained upward trend, with the overall market characterized by weak rebounds from low levels.
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