SunSirs: China BR Market Is Weak and Declining

Recently (9.17-9.23), the butadiene rubber market has been weak and declining. According to the commodity market analysis system of SunSirs, as of September 23, the butadiene rubber market price in East China was 11,780 RMB/ton, a decrease of 1.42% from 11,950 RMB/ton on September 17. The price of raw material butadiene has slightly decreased, and the cost support for butadiene rubber has weakened; BR production slightly decreased; Downstream tire production has slightly increased, providing support for the demand for butadiene rubber, but showing resistance to high priced sources. As the holiday approaches, businesses are cautious in their operations. As of September 23, the mainstream prices for Qilu, Daqing, Sichuan, and Yangtze BR in East China were 11,700-11,900 RMB/ton.

Recently (9.17-9.23), the price of butadiene has slightly decreased, and the cost support for butadiene rubber has weakened. According to the Commodity Market Analysis System of SunSirs, as of September 23, the price of butadiene was 9,240 RMB/ton, a decrease of 0.29% from 9,266 RMB/ton on September 17.

Recently (9.17-9.23), the construction of domestic BR units has slightly decreased to around 69%. BR units such as Haopu and Yihua have stopped for maintenance, and there are maintenance plans for BR units such as Qilu in the later stage. The supply of BR is expected to tighten in the later stage.

Demand side: Recently (9.17-9.23), downstream tire production has slightly increased, providing strong support for the demand in the butadiene rubber market. As of September 18th, the construction of semi steel tires by domestic tire companies has slightly increased to around 75%; The production of all steel tires by tire companies in Shandong Province has slightly decreased to around 65%.

From a fundamental perspective, analysts from SunSirs believe that on the one hand, downstream pre holiday stocking and partial maintenance of butadiene rubber equipment will provide certain support for demand and supply of butadiene rubber; On the other hand, the decline in raw material prices has led to cautious inquiries from downstream suppliers regarding high priced goods, which has formed a certain negative impact on the BR market. Overall, it is expected that BR will mainly consolidate weakly before the holiday.

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