Domestic BR prices have recently continued to decline. Data from SunSirs shows that as of June 26, the price in East China stood at 12,830 RMB/tonne, down 1.38% from 13,010 RMB/tonne at the end of February; meanwhile, the closing price of the main futures contract fell to 11,810 RMB/tonne. These drops have completely erased the gains driven by geopolitical tensions in the Middle East, returning prices to the baseline range seen before the conflict erupted.
As tensions in the Middle East have comprehensively cooled, the logic of geopolitical speculation driving commodity prices has collapsed. International crude oil prices have fluctuated downward, directly dragging down the price of butadiene. Current port inventories of butadiene remain high at 38,500 tonnes—a month-on-month increase of 2.39%. Ample feedstock supply and downward pressure on prices have steadily lowered the cost base for BR production, providing a solid foundation for the continued decline in rubber prices. According to SunSirs' market analysis system, the price of butadiene was 8,900 RMB/tonne as of June 26, down 10.94% from 9,993 RMB/tonne at the end of February.
Supply and demand dynamics have further accelerated the price decline. Production margins in the domestic BR industry have recently seen a slight recovery, boosting producer enthusiasm and steadily increasing plant operating rates; the industry's capacity utilization rate has risen to 69.26%, leading to a continued increase in market supply.
The downstream tire industry is currently in its traditional off-season, with operating rates at tire manufacturers edging lower. Downstream enterprises are generally adopting a cautious procurement strategy—buying only as needed—resulting in weak demand that struggles to absorb the ample market supply. As of June 18, operating rates for semi-steel tires stood at approximately 69%, while rates for all-steel tires in Shandong province were around 66%.
Following a "death cross" of moving averages in early April 2026, the market entered a long-term downward trend; the moving averages have remained in a bearish alignment, and prices have fallen sharply. This bearish moving average pattern persists. Overall, current market prices, costs, and supply-demand data for BR have returned to the fundamental levels seen prior to the Middle East conflict, and market sentiment remains generally cautious. In the short term, the bullish impact of geopolitical factors has fully played out, and there is still room for the price of the feedstock butadiene to fall; compounded by high industry operating rates and persistent weakness in downstream demand during the off-season, rubber prices are highly likely to continue fluctuating within a weak range.
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