SunSirs: Weak Consolidation of China BR Market in June

In June, the market of BR was weak and consolidated. According to the commodity market analysis system of SunSirs, as of June 26, the market price of BR in East China was 10,330 RMB/ton, down 0.86% slightly from 10,420 RMB/ton at the beginning of the month, and the peak in the cycle was 10,470 RMB/ton. The price of raw butadiene fell sharply, and the cost of BR fell sharply; In June, the construction of downstream tire factories declined slightly, and BR just needed support, but it was weaker than in the early stage; In June, the ex factory price of two barrels of oil BR has remained stable since it was reduced by 300 RMB/ton at the beginning of the month. As of June 26, the ex factory price of Daqing BR rubber of PetroChina Northeast Sales Company was 9,900 RMB/ton, and the domestic offer range of BR was 9,700 RMB/ton to 10,500 RMB/ton.

Supply side: In June, the Shunding device restarted and stopped simultaneously, with overall construction slightly higher than in the early stage; In early June, a total of 220,000 tons/year units from Yanshan Petrochemical and Shandong Yihua were restarted and put into normal operation; In addition, the 160,000 ton/year butadiene rubber plant of Daqing Petrochemical will be shut down for maintenance starting from June 10th.

Cost: In June, the price of butadiene fell sharply, and the cost of BR fell sharply. According to the Commodity Market Analysis System of SunSirs, as of June 26th, the price of butadiene was 5,873 RMB/ton, a decrease of 11.17% from 6,612 RMB/ton at the beginning of the month.

The natural rubber market rose slightly in June, slightly supporting BR. According to the Commodity Market Analysis System of SunSirs, as of June 26th, the price was 11,850 RMB/ton, an increase of 2.16% from 11,600 RMB/ton at the beginning of the month.

Demand: The tire operating rate slightly decreased in June, which has a strong demand for rubber support but has weakened compared to the previous period. It is understood that as of late May 2023, the operating load of all steel tires for rubber tire enterprises in Shandong region is 5.9%; The operating load of semi steel tires in domestic rubber tire enterprises is 70%.

SunSirs analysts believe that the price of raw materials has declined significantly, the supply side is still under pressure, and the downstream construction has declined slightly. The BR rubber industry chain showed a weak performance in June. It is expected that the BR market will continue its weak consolidation trend in the short term.

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