1. Price Trend

In November, the butadiene rubber (BR) market first fell and then rose. According to the data from SunSirs, the price of butadiene rubber was 11,000.75 RMB/ton in early November, and then fell to 10,725 RMB/ton, and the price rebounded to 11,075 RMB/ton at the end of the month. The overall end of the month rose by 0.68% from the beginning of the month. The price at the end of November is 3.26% higher than the lowest point among this month.

2. Market Analysis

First of all, in November, butadiene, the raw material, fell and then rose, forming a resonance with BR. According to data from SunSirs, the price of butadiene was 9,123 RMB/ton at the beginning of November, and dropped to 8,537 RMB/ton in the middle of the month. The price at the end of the month was 8,834 RMB/ton, which fell 3.17% at the end of the month compared to the beginning of the month.

Second, according to SunSirs, the inventory of domestic BR traders continued to decline slightly in November, forming a certain support for butadiene rubber. The current shutdown and maintenance of the Yangzi Petrochemical LLC’s BR unit and the Sichuan Petrochemical LLC’s start-up load are slightly lower. Qilu, Yanshan, Maoming, Daqing, Dushanzi and other units are operating normally.

Plus, the price of natural rubber rose sharply in November, pulling the price synthetic rubber up to a certain extent. According to data from SunSirs, the price of natural rubber at the beginning of November was 11,230 RMB/ton, and the high point at the end of the month was 12,116 RMB/ton, and the highest point rose by 7.89% from the beginning of the month.

Finally, the downstream--tire output decreased month-on-month and increased year-on-year. There is a certain demand for BR, but there is still a risk of weakening. According to SunSirs, in October 2019, the output of domestic rubber tire tires was 71.289 million, a decrease of 3.28% month-on-month and an increase of 3.4% year-on-year. From January to October, the output of domestic rubber tire tires was 70.285 million, an increase of 2.5% year-on-year.

3. Market Forecasting

SunSirs' analysts believe that although the natural rubber surge is favorable for the rise of synthetic rubber, but still need to be aware of the weakening of downstream demand in the later period, forming a certain negative for butadiene rubber. It is expected that the latter will have a limited increase.

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