Since the beginning of June, cis-1,4-polybutadiene rubber (BR) ended its downward trend in May and started the upward Road, and its price went up sharply. According to the monitoring of the SunSirs, the price of BR was 7,630 RMB/ ton at the beginning of June. As of July 3, the price of BR rose to 8,230RMB/ ton, an overall increase of 7.86%.

The price of raw material butadiene fell sharply from the beginning of June to the beginning of July, which could not promote the rise of BR from the cost side. According to the monitoring of SunSirs, the butadiene price in early June was 4,140 RMB/ ton, and as of July 2, the butadiene price dropped to 3,445 RMB/ ton, with an overall decline of 16.79%.

From the perspective of downstream tire industry, the operating rate of all steel tire fluctuated around 70% in May and June, with little change. The demand side was mainly rigid, but the increment was not much, and it formded a bottom support for BR. According to SunSirs, as of mid June, the operating rate of domestic all steel tire manufacturers was around 70%.

Compared with the price of natural rubber, natural rubber has driven the price of BR to a certain extent. At the beginning of June, the price of natural rubber was around 10,120 RMB/ ton, while the price of BR was 7,630 RMB/ ton, and the price difference was around 2,400 RMB/ ton. The huge price difference enhanced the substitutability of BR, and pushed the price of BR to move up.

Market Forecast: SunSirs analysts believe that the current price rise of BR is still a rebound rather than a reversal, mainly due to the small improvement in demand growth. On the one hand, as the global epidemic of COVID-19 continues to spread, trade friction is likely to intensify, casting a shadow on future demand. In addition, it is difficult for raw material prices to rebound significantly in the short term. From the perspective of the industrial chain, it is still difficult to form a later profit for BR. On the other hand, in the short term, driven by plant maintenance and natural rubber, BR may still have a small increase space, but on the whole, the price is difficult to reach 9,000 RMB/ ton.

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