SunSirs: China BR Market Trend Fluctuated within a Range in June

The butadiene rubber market in June fluctuated within a range. According to the commodity market analysis system of SunSirs, as of June 29th, the butadiene rubber market price in East China was 11,800 RMB/ton, a decrease of 0.92% from 11,910 RMB/ton at the beginning of the month. The highest point during the cycle was 12,040 RMB/ton, and the lowest point was 11,600 RMB/ton. The price of raw material butadiene has significantly decreased, and the cost center of butadiene rubber has shifted downwards; The production of butadiene rubber has fluctuated slightly, and the pressure on the supply side still exists; The downstream tires start to rise first and then fall, mainly supporting the rigid demand of butadiene rubber. As of June 29th, the mainstream prices for Qilu, Daqing, Sichuan, and Yangtze BR in East China were 11,750-12,100 RMB/ton.

The price of butadiene dropped significantly in June, and the cost support for butadiene rubber weakened significantly. According to the Commodity Market Analysis System of SunSirs, as of June 29th, the price of butadiene was 9,066 RMB/ton, a decrease of 6.85% from 9,733 RMB/ton at the beginning of the month.

In June, there was a slight fluctuation in the domestic butadiene rubber plant. As of the end of June, the domestic butadiene rubber production rate was around 6.85%, and supply pressure still exists.

Demand side: In early June, the downstream tire construction started at a low level during the Loong Boat Festival holiday. After the festival, the tire construction started significantly. In the middle and late days, the tire construction started again slightly lower. On the whole, the downstream tire industry maintained a strong demand for cis-1,4-polybutadiene rubber in June. As of June 27th, the production of semi steel tires by domestic tire companies has slightly decreased to around 71%; Around 62% of all steel tire production in Shandong tire enterprises has started.

From a fundamental perspective, analysts from SunSirs believe that the raw material butadiene market will significantly decline, and the cost support for butadiene rubber will weaken; Downstream demand for butadiene rubber is strongly supported, and there is still pressure on the supply side of butadiene rubber. Overall, it is expected that the butadiene rubber market will consolidate weakly in the later stage.

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