SunSirs: China BR Market Is Weak and Declining

Recently (10.1-10.14), the butadiene rubber market has been weak and declining. According to the commodity market analysis system of SunSirs, as of October 14th, the butadiene rubber market price in East China was 11,310 RMB/ton, a decrease of 3.08% from 11,670 RMB/ton at the beginning of the month. The price of raw material butadiene has significantly decreased, and the cost support for butadiene rubber has weakened; BR production has slightly increased; The downstream tire production holiday has significantly decreased, providing weak support for butadiene rubber. The fundamentals are weak, and the supply price of butadiene rubber has decreased after the holiday, causing a weak decline in market prices. As of October 14th, the mainstream prices for Qilu, Daqing, Sichuan, and Yangtze BR in East China were 11,200-11,500 RMB/ton.

Recently (10.1-10.14), international crude oil prices have declined and butadiene supply prices have decreased, resulting in a significant drop in domestic butadiene prices and a decrease in the cost center of butadiene rubber. According to the Commodity Market Analysis System of SunSirs, as of October 14th, the price of butadiene was 8,446 RMB/ton, a decrease of 4.95% from 8,886 RMB/ton at the beginning of the month.

Demand side: Recently (10.1-10.14), due to the National Day holiday, the average production of downstream tires has significantly decreased, which has a bearish impact on the butadiene rubber market. As of October 9th, the construction of semi steel tires by domestic tire companies has slightly increased to around 42%; The production of all steel tires by tire companies in Shandong Province has slightly decreased to around 42%.

From a fundamental perspective, analysts from SunSirs believe that on the one hand, downstream holiday construction has significantly decreased and post holiday improvement has been slow. The construction of butadiene rubber has slightly increased, and the demand and supply sides are dragging down the butadiene rubber market; On the other hand, the decline in raw material prices has formed a certain negative impact on the BR market, and it is expected that BR will mainly consolidate weakly in the short term.

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