Since September, the Shunding rubber market has surged in the early stage and fluctuated at mid to high levels. As of September 20th, the price of Shunding rubber in the East China region was 15700 yuan/ton, up 3.43% from 15180 yuan/ton at the beginning of the month, and the high point during the cycle was 16210 yuan/ton. The cost and supply side provide strong support for butadiene rubber, while weak downstream demand to some extent suppresses the growth of butadiene rubber.
Butadiene first rose and then fell in September, with prices rising at the beginning of the month due to maintenance of cracking units and crude oil; The gradual resumption of mid month maintenance equipment and the increase in port inventory have led to a correction in butadiene prices. The data shows that in mid September, the inventory of butadiene in East China ports was 23700 tons, an increase of 4700 tons compared to the previous month. As of September 20th, the price of butadiene was 13833 yuan/ton, an increase of 3.75 yuan/ton from 13333 yuan/ton at the beginning of the month, and a decrease of 6.74% from the high point of 14833 yuan/ton during the cycle.
In terms of supply, since September, facilities such as Qilu and Taixiang have been shut down for maintenance, coupled with the loss reduction of private factories, resulting in a decrease in the operating rate of Gaoshun Shunding in China to 5.90% and a decline in weekly production. Social inventory continues to decrease, and low inventory forms a bottom support for rubber prices.
Downstream tire production has declined, resulting in insufficient support for butadiene rubber. As of September 11th, the domestic semi steel tire production rate was 65.53%; The operating rate of all steel tires is 63.53%. The inventory turnover of semi-finished steel tires is 44.7 days, while that of all steel tires is 36.4 days. The demand for end commercial and passenger vehicles is relatively weak. Although tire companies have issued price increase letters, with a 2% -5% increase, the high prices of raw materials have suppressed profits, and factories only maintain essential purchases. There is insufficient willingness to proactively replenish inventory, and the peak season delivery falls short of expectations.
Market forecast:
The spot price and moving average of butadiene rubber show that in the early stage, the spot price of butadiene rubber reversed and rose from late June, and the price continued to rise along the moving average system, forming a long position. After reaching above 16000 in September, the price fell below the 5-day short-term moving average, and the short-term upward trend slowed down. The 10/20 day moving average remains upward, and medium-term support is still in place. Short term or volatile pullback, testing the support of the 10 day and 20 day moving averages; If the support is held, the bullish pattern will continue; If the moving average falls below, the current rebound market will weaken.
Overall, in the short term, Shunding will maintain a high level and fluctuate widely. Low inventory and maintenance equipment continue to support bottom prices; However, there is an expectation of restart in the butadiene plant, which weakens cost support and suppresses upward space due to downstream high price resistance. If the maintenance continues or there is a geopolitical disturbance in crude oil, there is a chance for the price to rebound.
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