In December, the market of BR fell first and then stabilized. According to the data monitoring of SunSirs, the price of BR was 10,580 RMB/ton as of December 30, down 3.73% from 10,990 RMB/ton at the beginning of the month. At the beginning of the month, under the pressure of the supply side of BR, the ex factory price of two barrels of oil of BR was lowered, and the market price of BR fell 4.73% within eight days. In the later period, as the price of BR fell sharply, downstream inquiries increased, and the overall market was stable.

Supply side: the commencement of BR in December was slightly higher than that in November, and the supply side was under pressure. According to the business agency, the high load or full load production of BR devices in Daqing, Sichuan, Maoming, Qixiang, and the restart of early maintenance devices such as Haopu still put pressure on the supply side of BR.

Cost: butadiene prices rose sharply in December, while the cost of BR rose. According to the monitoring of SunSirs, as of December 30, the price of butadiene was 7,241 RMB/ton, up 13.01% from 6,407 RMB/ton at the beginning of the month.

In December, the natural rubber market fluctuated and consolidated, which still supported BR. As of December 30, the price was 12,250 RMB/ton, up 0.25% from 12,220 RMB/ton at the beginning of the month. The monthly high point was 12,520 RMB/ton, and the low point was 12,160 RMB/ton. The early December coincided with traders and downstream factories preparing goods before the year. The domestic latex market experienced a process of firming up to stabilizing. In the month, the index of substitute rubber increased, and the import rubber continued to increase; In the later period, with the end of Chinese manufacturers' stock up, the export price of Southeast Asian rubber stabilized until a small drop of 200-300 RMB/ton. With the arrival of imported rubber from China's main ports and the accumulation of social inventory, the price of China's natural rubber market continues to fluctuate, with a slight weakening trend.

Demand side: In December, due to the further liberalization of epidemic prevention, the manufacturing industry in some domestic regions was impacted in the short term, the downstream tire enterprises started to decline, and the demand for BR became weaker. According to SunSirs, the construction of all steel tires in Shandong will be less than 60%.

According to the analysts of SunSirs, the pressure on the supply side of BR is still there, the cost side is higher, but the demand side is weak in the short term. If the demand side does not improve in the future, then BR will continue to run weak in China in January 2023.

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