SunSirs: China BR Market Rose significantly and will be Operated at a High Level in the Short Term

In early September, the spot market for BR showed a significant upward trend. According to the Commodity Market Analysis System of SunSirs, as of September 10th, the market price of BR in East China was 13,560 RMB/ton, an increase of 13.28% from 11,970 RMB/ton at the beginning of the month.

Firstly, the price of raw material butadiene continues to rise, with strong cost support for BR. Secondly, the shutdown and maintenance of Shunding units such as Jinzhou Petrochemical and Haopu New Materials, as well as the planned recent maintenance of Shunding units of Sichuan Petrochemical, have resulted in tight expectations for the supply of Shunding rubber. Thirdly, rubber futures have risen significantly since September, driving bullish sentiment in the spot market. Finally, stable downstream construction requires support from the superimposed market inventory at a medium to low level. The supply price of BR has significantly increased since September, and the domestic BR market merchants have reported a significant increase in prices. As of September 10th, the mainstream domestic BR market reported 13,200-13,900 RMB/ton. However, as the price of BR has risen, downstream resistance has become stronger, and some early high level offers have slightly corrected in recent days.

On September 8th, the closing price of BR 2401 was 13,550 RMB/ton, an increase of 11.57% from the closing price of 12,145 RMB/ton on August 31st. During this period, the maximum charge reached 14,600 RMB/ton.

The industry's construction started slightly lower, and supply pressure has eased. In early September, the shutdown and maintenance of Shunding units such as Jinzhou Petrochemical and Haopu New Materials, as well as the planned recent maintenance of Shunding units at Sichuan Petrochemical, resulted in tight expectations for the supply of Shunding rubber.

In early September, the butadiene market continued to rise, and the cost support for BR continued to strengthen. According to the Commodity Market Analysis System of SunSirs, as of September 10th, the price of butadiene was 8,592 RMB/ton, an increase of 12.67% from 7,626 RMB/ton on September 1st. The main production enterprise Sinopec and its sales companies have seen two increases in butadiene prices of 500 RMB/ton to 8,600 RMB/ton. The 30,000 ton/year butadiene plant of Liaoyang Petrochemical is operating steadily, with 290 tons of supply bidding for export, with a bidding bottom price of 8,000 RMB/ton; The transaction price is 8,590 RMB/ton. The short-term supply side of butadiene is affected by a bullish trend. The 120,000 ton/year butadiene plant in North Huajin is operating steadily, with 56 tons of supply bidding for export, with a bidding bottom price of 8,360 RMB/ton.

Demand side: In early September, the tire operating rate was basically stable, with rubber as the main support. It is understood that as of early September 2023, the operating load of all steel tires for rubber tire enterprises in Shandong region was 6.4%; The operating load of semi steel tires for domestic rubber tire enterprises is 7.2%.

SunSirs analysts believe that the price of BR raw materials is running at a high level, and there is not much supply pressure. In addition, with the support of downstream demand, it is expected that the spot market of BR will remain at a high level in the short term.

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