The geopolitical risk premium in the Middle East has rapidly dissipated, and international oil prices have fallen sharply. Brent crude oil has fallen from above $95 per barrel to around $85, with a maximum daily decline of over 7%, driving the entire domestic energy and chemical industry chain to weaken, and synthetic rubber futures and spot prices have synchronously declined. Data shows that as of July 28th, the price of butadiene rubber in the East China region was 13540 yuan/ton, a decrease of 3.70% from last Friday’s 14060 yuan/ton.
In terms of futures, the main contract of Shunding Rubber BR2609 fell 6.22% on the 28th, closing at 12120 yuan/ton, with a cumulative drop of nearly 900 yuan per week; The ex factory price of butadiene rubber in the spot market has been lowered by 400 yuan/ton to 13200 yuan/ton, and traders have voluntarily offered discounts for shipments, resulting in a synchronous decline in spot market prices.
The pressure on supply and demand fundamentals has increased, with domestic synthetic rubber plants operating at over 66% capacity and sufficient market supply; The downstream tire industry is traditionally operating at a low level during the off-season. As of July 24th, the operating load of semi steel tires in domestic tire enterprises was 6.5%, while the operating load of all steel tires in Shandong tire enterprises was 6.5%; Domestic tire companies have 40.3 days of finished steel tire inventory and 45.6 days of semi-finished steel tire inventory.
Market forecast: In the short term, the market is highly bound to fluctuations in crude oil prices. If international oil prices continue to be weak, the support for raw material costs will loosen, and butadiene rubber will maintain a weak pattern. If crude oil stops falling and rebounds, and downstream tire production significantly rebounds, the price of butadiene rubber will rise again.
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